Short term investment

Squoozy

We are in the process of selling a relative’s home (we have Power of attorney) because she has gone into a nursing home. She will be self funding but has enough savings to pay for about 9 months of care. The proceeds from the house sale will need to pay for her future care but we are wondering if we can invest some of it so that it lasts for longer, rather than just letting it sit in a bank account. The problem is we will need to keep withdrawing some to pay the care fees. Does anyone have any advice re where we can put the money? It will be about £120,000. 

Albermarle

Investing is only suitable for the long term, as short, or even medium term it could easily lose significant value.
So you need to save the money in savings accounts with the highest interest. You could have some in easy access and some in say one or two years fixed term savings ( which pay better interest).
This would at least give you some more interest than sitting in a current account.
Two points to note
You should not have more than £85K ( including interest) with any one bank/savings provider.
You may be liable for some tax on the interest . You say 'we', are you both taxpayers ?

badger09

Albermarle said:

Investing is only suitable for the long term, as short, or even medium term it could easily lose significant value.
So you need to save the money in savings accounts with the highest interest. You could have some in easy access and some in say one or two years fixed term savings ( which pay better interest).
This would at least give you some more interest than sitting in a current account.
Two points to note
You should not have more than £85K ( including interest) with any one bank/savings provider.
You may be liable for some tax on the interest . You say 'we', are you both taxpayers ?

OP will be operating accounts as POA for relative, so their personal tax position is irrelevant. 

I agree, investing is not suitable. An instant/easy access or even limited access account could be suitable for the 1-2 years fees, plus a 1 year fix. Depending on the annual fees, which are likely to rise. 

Keep_pedalling

You could spread it through a number of accounts with the amount not immediately needed in 1 to 2 year fixed interest savings accounts.

jaypers

As stated, don’t have more than £85k with a single institution.

Personally I would do something along the lines of keeping a years worth of fees in the best paying Easy Access account and put the rest in the best paying 1 year Fixed account. Once that matures, re-review and do similar again perhaps. 

Doctor_Who

Having been in this situation some years ago. If you do fix some of the money for 1-2 years (be careful to keep enough available in an EA account) it's worth considering accounts that pay away the interest monthly/quarterly so that you have access to it to help with the fees.

Squoozy

Thanks everyone, I had forgotten about the 85 k limit so that’s a really good piece of advice. We’ll try to spread the money in appropriate accounts. 

cloud_dog

Squoozy said:

We are in the process of selling a relative’s home (we have Power of attorney) because she has gone into a nursing home. She will be self funding but has enough savings to pay for about 9 months of care. The proceeds from the house sale will need to pay for her future care but we are wondering if we can invest some of it so that it lasts for longer, rather than just letting it sit in a bank account. The problem is we will need to keep withdrawing some to pay the care fees. Does anyone have any advice re where we can put the money? It will be about £120,000. 

I (we, me and bruv) have POA for our mother who is a nursing home, and she had c. 5 years worth of costs covered, and even with there being c. 5 years I didn't feel it was appropriate or in her best interest to look at investments for some of the cash, so it has remained in EA, notice, FR accounts.