How to invest proceeds of house sale to pay for care.

Suziekettles

I hold registered power of attorney for my Mum, she's now in a nursing home, she is self funded. Her home sale will complete shortly, in the region of £220k. There are funds available to cover her first year, but with interest rates so low, I don't know how to invest the sale proceeds. I don't wish to do anything remotely risky. Do I need to see a financial advisor, is is better to ask bank/building society or independent? Any advice much appreciated.

Keep_pedalling

The call on this cash is all going to be short term so investing is to risky. You are not going to be able to beat inflation so all you can do is maximise interest. 

As she has enough other savings to cover 1 year of costs, you could put sufficient away in one and two year fixed accounts to cover the following two years. I would not fix for longer as I think you will get better rates come through in the coming months, so I would but the rest into Chase as a holding option which is currently 1.5%.

Linton

I agree with Keep-Pedalling that any risk would be inappropriate and that you should keep a significant amount in cash.  Any interest really would make little difference to Mum's situation.  You would not be doing anything wrong to simply put all of the money in excess of the 1 year's cash into an NS&I account where there is low interest but 100% government guaranteed protection and easy access.  

Albermarle

 I don't know how to invest the sale proceeds. I don't wish to do anything remotely risky. 

Investing always has an element of risk, it can not be avoided. Savings accounts only are suitable.

Compare The Best UK Savings Accounts | moneyfacts.co.uk

tacpot12

To be safe, you might  need to split the £220K across multiple banks to benefit from the Financial Services Compensation Scheme. 

nyermen

Also consider the costs of the care when planning any 1y/2y/3y fixes - are they contractually agreed, or could they go up by RPI in a years time for example.

dunstonh

The average life expectancy in a nursing home is 2 years.   So, investing it would be unsuitable.

you are stuck between a rock and hard place.   

LHW99

dunstonh said:

The average life expectancy in a nursing home is 2 years.   So, investing it would be unsuitable.

you are stuck between a rock and hard place.   

Although as an average, 50% will be there longer a friend's relative was in care for 8 years). An Immediate Care Needs Annuity would be an option. but you would be giving up the capital for the peace of mind of having guaranteed payments. It would depend on your mum's age, overall health and reason for needing care.

Make sure she has also claimed for the higher rate of Attendance Allowance, which is not means tested.

I_Love_comps

My close relative is in a nursing. Monthly fees are now nearer to the £6,000mark .
Things you might be able to claim.
Attendance Allowance - because your mom is self funding - This will stop if /when you need to apply for money from the council - which will not be until you have around £21.000 left .
FNC if your mother requires nursing care.
You can still claim the winter fuel allowance. but it will be half the amount.
The home she is in might also provide a free TV licence, if she has one in her room.

It is not worth putting the money into an account where you cannot get hold of it.
Things that to be paid for  ; Toiletries, personal care - eg haircut and foot care. Also clothes - Choose ones that do not shrink in the big washing machine.

If your mother already has bank accounts use those and split the money across them.

If you need to PM me . Please do .

badger09

No point involving an IFA. They deal with investments, and as indicated, investments are inappropriate for mum. 

When you have a confirmed completion date for the sale, open an account as POA with whoever is offering the highest instant access rate at the time & have solicitor pay the sales proceeds into it. FSCS cover (up to £1m) is available for residential house sale proceeds for up to 6 months. 

That buys you time to decide what to do with it. I would probably stick 1 year’s fees in the best 1 year fix immediately, and see how interest rates on offer change over the next couple of months. 

Suziekettles

Many thanks for replies. Altho’ assessed for continuing health care funding (the one where the cost of care is completely funded) Mum didn’t qualify, she does get a contribution via funded nursing care, she has also qualified for the higher rate of attendance allowance, this will commence next month, 6 months after her stroke. I learned today of the FSCS cover from proceeds of sale for 6months at the Leeds BS.
A relative is determined to consult their financial advisor about  Mum’s house sale proceeds, I think I now have a better idea how to proceed and not to tie the money up in any longer term investments.