60 with 60k and what to do...?

Floss

Has your mum made a will to formalise her wish for her 3 children to benefit from her estate?

badmemory

If she is on benefits then having savings may affect what she gets until they are gone.  Definitely check her state pension entitlement, at about £800 a year to buy she would make it back in very few years, I've forgotten just how many but it is very good value. 

Put £2880 a year (if she has no earned income) into a SIPP, the tax man will give her £720 on top.  I doubt she will get better anywhere.  If she is quick she can get in in this tax year 21/22. 

Buy her funeral.  Not a plan a funeral.  The co-op type, paid all up front not monthly.  This will reduce what she has in savings & will mean she can keep more of them without losing benefits, if she is on that type of benefit. 

If she uses a SIPP for a pension then she can leave it to you and your siblings or withdraw as and when she needs it.  Whilst the above will not use up all or much at all of the £60k, it will form a basis of what she later has available & I am sure others will have some good ideas.

steampowered

The average life expectancy for women retiring now is 87.

As she is 60, this money will need to last her 27 years. So the £60k works out as around £2k per year.

It sounds like your mum is going to be reliant on the state pension, which is currently £9.9k (assuming she qualifies for the full state pension). 

Daliah

tebbins said:

JustAnotherSaver said:

Will have to be short & sweet for now as on my break at work but:

Should've added that she's not in work through disability. She stopped work in '03 (disability) at the age of 41, picked it up again for about 18 month around 2016-17 but is out of work again. 
Collects a benefit. I'd have to ask what name it was if that matters. 
On top of this should've also added that she does get a fraction of my dad's pension which was further reduced from what it could've been simply due to their age gap despite being married for about 30yrs.

Not pensions as such that she's against, just losing money to 'the system' which from what happened with my dad's is how she (& I) thought pensions would be on death. 

Hope that helps a little more. Anything else will have to be later as got to get back to work. 

There is a seperate benefits part of the forum, in her situation you could look at Pension Credit and making sure her NI record is maxed out. As she's 60 now I *think* she'll get the New State Pension, you need 35 qualifying years to get the full state pension and if she's short (she shouldn't be due to receiving a benefit over a long period).

I am afraid, nobody gets Pension Credit unless they, and any partner, are at least state pension age, which at present is 66, but for someone who is 60 now will be 67. Reaching 35 NI years does not entitle you to SP. Only state pension age does.

JustAnotherSaver

Albermarle said:

I am wondering why your Mum has sat on this cash 'doing nothing' and at age 60 suddenly wants to invest it . It is probably a good idea to invest some of it, but you and her have to be aware that in a few months  time it could have become more or less.
Even a medium/low risk fund can drop 20% very easily .

This money only came about when my dad died. In the years that passed the interest rates weren't terrible so the money was split across various accounts. She's also having an injection of 25k when my nans (estate? correct term?) is sorted out.

But with interest rates so poor these days, I suggested to her that she may want to consider (before anyone says I'm forcing her) having "an amount" that she's comfortable with in ready cash with the remainder invested (to try and get some decent returns vs what's currently available) because let's face it, no/most modest living 60yr olds need access to a whole 60-100k at short notice. Perhaps a split over a S&S ISA and pension if there's pension withdrawal restrictions at her age?

I have spelled out to her the risk of investing though.

johnrrose said:

Best cash ISA with no restrictions I know is Skipton BS 0.65% variable but clearly doesn't compete with Virgin on yield, even if savings interest  > £1k/year

0.65% is the kind of thing she's looking at trying to beat tbh.

tebbins - I had a look and her benefit is marked DWP PIP on her statement. She did have another one a few years ago but that stopped. DLA or ELA or whatever it was.

badmemory

If it is PIP she gets then I believe your income has no bearing on it so that is good news

JustAnotherSaver

Floss said:

Has your mum made a will to formalise her wish for her 3 children to benefit from her estate?

No not yet. She keeps meaning to get round to it but has said she wants me to go with her.

But it's remembering when it comes to me having annual leave. It's not really the first thing on my mind and I guess it slips hers also.

Though without a will, wouldn't it be split 3 ways anyway?

Her wish is basically for an equal split. The house is owned outright and any cash split equally 3 ways after all bills are paid.

None of us will squabble over it anyway. I know the old sayings of easier said than done and money is the root of all evil, so on & so forth. She's just had to endure how scummy some people can be over wills which is real sad but you'll just have to take my word for it than my brother, sister & I, we're not that type.

badmemory said:

If she is on benefits then having savings may affect what she gets until they are gone.  Definitely check her state pension entitlement, at about £800 a year to buy she would make it back in very few years, I've forgotten just how many but it is very good value. 

Put £2880 a year (if she has no earned income) into a SIPP, the tax man will give her £720 on top.  I doubt she will get better anywhere.  If she is quick she can get in in this tax year 21/22. 

Buy her funeral.  Not a plan a funeral.  The co-op type, paid all up front not monthly.  This will reduce what she has in savings & will mean she can keep more of them without losing benefits, if she is on that type of benefit. 

If she uses a SIPP for a pension then she can leave it to you and your siblings or withdraw as and when she needs it.  Whilst the above will not use up all or much at all of the £60k, it will form a basis of what she later has available & I am sure others will have some good ideas.

Thanks for the response.

So she can withdraw 'as and when' from a pension then I take it due to her age?

I'm sure i asked years ago about buying a funeral (as it was another thing she'd asked me to look in to for her as she was interested in it) and the advice was not to do it. Not cost effective or whatever.

But yeah, we went with the co-op for my dad. Real basic, just about cheapest everything. The only thing I remember us spending on was the option of jewellery - you could get their print of their finger/hand/foot for a necklace which we all did. The rest was just cheap because he wouldn't have wanted his money spent on a flash funeral. Waste of money he'd have said so we kept it all cheap.

badmemory

Daliah said:

I am afraid, nobody gets Pension Credit unless they, and any partner, are at least state pension age, which at present is 66, but for someone who is 60 now will be 67. Reaching 35 NI years does not entitle you to SP. Only state pension age does.

PIP doesn't entitle anyone to payments towards their state pension I think so it is still vital that her entitlement is checked & topped up if necessary.  So 6 years to obtain paying currently & several that can be bought now.  Absolutely vital!  Check it out today!  You can go on line & check how much she is entitled to so far.  Can someone please post the link?

enthusiasticsaver

There are a number of things your mum could do with her savings. Keeping some emergency cash back is sensible but if she has no need for the whole £60k in the near future then looking into investments in stocks and shares ISAs  is sensible. When I got into investing for the first time I went with a low charges well diversified fund of trackers. It obviously depends on her attitude to risk though as there are no guarantees with investing. If she doesn’t have a pension then that would make sense as she will benefit from the government HMRC top up of 25%. 

This is the link to check her state pension https://www.gov.uk/check-state-pension

Floss

JustAnotherSaver said:

Floss said:

Has your mum made a will to formalise her wish for her 3 children to benefit from her estate?

No not yet. She keeps meaning to get round to it but has said she wants me to go with her.

But it's remembering when it comes to me having annual leave. It's not really the first thing on my mind and I guess it slips hers also.

Though without a will, wouldn't it be split 3 ways anyway?

Her wish is basically for an equal split. The house is owned outright and any cash split equally 3 ways after all bills are paid.

Technically yes, but having a will makes things easier & potentially quicker.