Where to put money from a house sale

NorthernGeezer_2

I am in the process of selling my fathers house as he is going into a care home.
The proceeds from the sale, Around £250,000 will be used to fund his care, around £1500 a week.
Best place to put this money so we are able to pay out £6500 a month.

Bigwheels1111

Split over 2 or 3 accounts for sure.

Some fixed and the rest easy access.

The other issue is will you pay tax on the interes ?.

Keep 72k in santander easy access if still avaliable at 5.2%

Put the rest in NS&I 1 year fixed at 6.2% £11,036.00 interest on £178,000, as NS&I is backed by the gov all money is protected. Not like FSCS

where 85k is protected.

Ayr_Rage

For the next 12 months

https://www.santander.co.uk/personal/savings-and-investments/savings/easy-access-saver

Warslet

Firstly, I’m sorry to hear about your father going into a Care Home and having to sell his property. I have POA for my mother-in-law and did a similar thing recently. £250,000 at 6.2% (GGB with NS&I if still available) equates to £1291pm. Without knowing his other income you would need to have access to some capital each month to pay for his care as above is a 12 month bond. No need to worry about limit of £85,000 as with most other fixed rate bonds. Also would need to be aware of income tax liability on savings income dependant on his other income. Another option is £20000 is a Fixed Rate ISA to negate some tax but have access to upon review in 12 months. 

km1500

could I ask how you transferred your 250k from presumably your current account to ns and i ?

xylophone

Around £250,000 will be used to fund his care, around £1500 a week.
Best place to put this money so we are able to pay out £6500 a month.

You have Power of Attorney for your father? Or he is capable of managing his financial affairs  but  going into residential care for reasons of physical frailty?

The first thing to consider is what other sources of income are available to your father besides interest/dividends etc?

State Pension?

Occupational Pension?

Attendance Allowance?

How much per week do these sources contribute to the cost of care?

You/he might consider opening a current account with Santander to receive this income and also the 5.2% savings account (which could hold at least a year's  requirement).

Set up a SO/DD to pay the care fees from this account, the cash in which will be supplemented as required by monthly withdrawals  from the savings account.

Does he have cash ISA(s)? If not, it will be as well to open so as to use his allowance.

Open the NS&I bond as mentioned by other posters.

Remember that if your father is receiving interest over £10,000 per annum from  non ISA sources, HMRC must be advised.

https://www.gov.uk/apply-tax-free-interest-on-savings

NorthernGeezer_2

Firstly, thanks to everyone for the advice.
Yes, I hold POA for him, he's going in to care because he has Dementia.
Income from other sources, state and occupational pensions, and attendance allowance giving an income of £2500 a month, leaving himself to fund the other £4000.
Santander, ISA, and NS&I are the way to go for sure, as soon as the house is sold.
A valid question from KM1500 I think regarding large amounts of money from a standard bank account, in this case Halifax, looking forward to that answer.

Ayr_Rage

@NorthernGeezer_2 don't bank on Santander and NS&I, the Santander account is only open until 17th September at the latest, if sold out it will close earlier.

As for NS&I, once they have met their target that will also close.

NorthernGeezer_2

Bigwheels1111 said:

Split over 2 or 3 accounts for sure.

Some fixed and the rest easy access.

The other issue is will you pay tax on the interes ?.

Keep 72k in santander easy access if still avaliable at 5.2%

Put the rest in NS&I 1 year fixed at 6.2% £11,036.00 interest on £178,000, as NS&I is backed by the gov all money is protected. Not like FSCS

where 85k is protected.

He's a basic rate taxpayer yeah and pays tax accordingly on his earned income.
Bit of a !!!!!! paying MORE tax though, if my sums are correct and we put say £150,000 in an NS&I bond at 6.2% he'll get £9300 interest, less his £1000 allowance he'll pay tax on £8300 which equates to a tax bill of £1660.
I'll put another £20000 in an ISA which leaves him £80000 for his care fee's.
I'll jiggle the final figures once the house is sold.
Whats the deal with informing the taxman if he earns over £10000 interest in a year??

NorthernGeezer_2

Ayr_Rage said:

@NorthernGeezer_2 don't bank on Santander and NS&I, the Santander account is only open until 17th September at the latest, if sold out it will close earlier.

As for NS&I, once they have met their target that will also close.

I saw that yeah on there website.

NorthernGeezer_2

Ayr_Rage said:

@NorthernGeezer_2 don't bank on Santander and NS&I, the Santander account is only open until 17th September at the latest, if sold out it will close earlier.

As for NS&I, once they have met their target that will also close.

NS&I are still advertising the green bond, I suppose it depends on how quick the cash comes in from the house sale.