Care Home - Banking

Gingercat2011

My 83 year old MIL has recently moved to a Care Home (in Scotland). Her home has just been sold to fund her care.
My questions are:
What is the best bank account to keep the funds from house sale in?  She has a current and savings account with Nationwide. 
If money is in a high interest account, will she have to pay more tax?  She gets full state pension and has two small private pensions.
How do I get around the £85k maximum for deposit protection?  She doesn’t have a passport, driving license etc. required as ID to open a new account?
(my husband has POA) 
Thanks

OldMusicGuy

You can hold a large balance (up to 1 million IIRC) for six months in a normal bank account and it will be covered by the FSCS guarantee. After that, you will have to spread it around various banks. You could consider NS&I because you can hold up to 1 million there, but rates of interest are not the best. 

She will have likely have to pay tax on interest but I don't know how this works in Scotland (I believe income tax is devolved).

And here's the big issue - you will find it very, very hard to open accounts without a driving license or passport. We ran into this problem with my 96 year old FiL. We tried everything and gave up in the end, we could not get any new accounts opened due to lack of ID. Fortunately he already had an NS&I account so we have used that.

Moral of the story - do NOT let your passport lapse. 

One additional point - have you considered an immediate care needs annuity?

RAS

You say hubbie has POA? Is this fully registered( nor sure if the OPG covers Scotland but there will be an equivalent)? If so, it is his identity that will needs confirming.