Safe investments for elderly relative's savings.

pthompson

MK62 said:

just be sure to use a couple of accounts so that no institution holds more than £85k (I'd probably go no higher than £80k though to allow for outstanding interest)

Good point.  Thank-you.

pthompson

jimjames said:

First thing is to move the current account balance. That could be earning nearly £4000 per year in a savings account like Chip or similar paying over 5%

The Chip savings a/c looks interesting.  Thanks.

pthompson

badger09 said:

They might also consider spending some, though for many of us, that requires a change of mindset😊. 

Unfortunately he's of the mindset / generation that won't spend anything...   Living on supermarket yellow-label discounted food and everything else from charity shops.  So sad. 

Hoenir

pthompson said:

badger09 said:

They might also consider spending some, though for many of us, that requires a change of mindset😊. 

Unfortunately he's of the mindset / generation that won't spend anything...   Living on supermarket yellow-label discounted food and everything else from charity shops.  So sad. 

Reassuring when your older to have a safety net of savings. Consumerism is seen for what it is. 

LHW99

Use a fixed rate ISA (maybe 2 year) for £20k of the C/A money. Look at which banks / building societies are available / reasonably accessible by the person with PoA.

Many smaller (local) societies can offer passbook accounts (not top interest rates but FSCS covered), although maybe not on fixed rate ISA's, so the rest could go into a non-ISA postal 6 month or one year account, and could be swapped to an ISA after next April.

For an elderly person, I would personally not go with one of the modern providers (Chip, Raisin etc) as the person won't have heard of them, and even with PoA you do have to take account of their preferences if they are in any way capable. A more traditionally accessed account will mean they have paperwork to reassure them the money is being looked after, whenever they feel it necessary to check.

badger09

Hoenir said:

pthompson said:

badger09 said:

They might also consider spending some, though for many of us, that requires a change of mindset😊. 

Unfortunately he's of the mindset / generation that won't spend anything...   Living on supermarket yellow-label discounted food and everything else from charity shops.  So sad. 

Reassuring when you’re older to have a safety net of savings. Consumerism is seen for what it is. 

It is indeed. But spending, especially in later life, doesn’t have to be on acquiring ‘stuff’. There’s little reassurance to be gained by dying with £xx,000 in the bank because you wouldn’t spend money to heat your home/eat decent quality food/sleep in a comfortable bed/pay someone to help in the garden, clean your windows or generally make life easier for you. 

Albermarle

 How about £20k into an ISA tracking FTSE?  

This does not fit with the low risk criteria mentioned in the OP. 

If he did want to invest some of it rather than saving it all, then a medium/low risk global multi asset fund would probably be more appropriate. 

BooJewels

LHW99 said:

Use a fixed rate ISA (maybe 2 year) for £20k of the C/A money. Look at which banks / building societies are available / reasonably accessible by the person with PoA.

Many smaller (local) societies can offer passbook accounts (not top interest rates but FSCS covered), although maybe not on fixed rate ISA's, so the rest could go into a non-ISA postal 6 month or one year account, and could be swapped to an ISA after next April.

For an elderly person, I would personally not go with one of the modern providers (Chip, Raisin etc) as the person won't have heard of them, and even with PoA you do have to take account of their preferences if they are in any way capable. A more traditionally accessed account will mean they have paperwork to reassure them the money is being looked after, whenever they feel it necessary to check.

You also need to consider which providers even allow accounts to be managed under an LPA - not all do - and they often have specific opening requirements for PoA managed accounts - such as a paper application, rather than on-line etc.  This is where more mainstream accounts might prove more suitable.

If the chap is reluctant to spend his savings, maybe suggest that he puts the principle of his savings into an account that pays out monthly interest to their usual current account - that would give them some extra spending money each month without reducing the principle. 

For arguments sake, just to illustrate, because I know that Ford Money allow LPA accounts - they've recently added a 2 year fix which pays 4.65% monthly - if they were to put £50k into that - it would pay out just under £200 per month - that could make their life more comfortable as they go along.  If they didn't want to lock away the funds for 2 years, even their flexible saver pays 4.51% monthly and £50k would give rise to just under £190 per month.  If you wanted to keep it all at NS&I as a trusted brand where they're already an account holder, their income bonds (effectively easy access, apart from the last £500) pay 3.59% monthly, so the £50k there would yield £150 / month.

pthompson

BooJewels said:

LHW99 said:

Use a fixed rate ISA (maybe 2 year) for £20k of the C/A money. Look at which banks / building societies are available / reasonably accessible by the person with PoA.

Many smaller (local) societies can offer passbook accounts (not top interest rates but FSCS covered), although maybe not on fixed rate ISA's, so the rest could go into a non-ISA postal 6 month or one year account, and could be swapped to an ISA after next April.

For an elderly person, I would personally not go with one of the modern providers (Chip, Raisin etc) as the person won't have heard of them, and even with PoA you do have to take account of their preferences if they are in any way capable. A more traditionally accessed account will mean they have paperwork to reassure them the money is being looked after, whenever they feel it necessary to check.

You also need to consider which providers even allow accounts to be managed under an LPA - not all do - and they often have specific opening requirements for PoA managed accounts - such as a paper application, rather than on-line etc.  This is where more mainstream accounts might prove more suitable.

If the chap is reluctant to spend his savings, maybe suggest that he puts the principle of his savings into an account that pays out monthly interest to their usual current account - that would give them some extra spending money each month without reducing the principle. 

For arguments sake, just to illustrate, because I know that Ford Money allow LPA accounts - they've recently added a 2 year fix which pays 4.65% monthly - if they were to put £50k into that - it would pay out just under £200 per month - that could make their life more comfortable as they go along.  If they didn't want to lock away the funds for 2 years, even their flexible saver pays 4.51% monthly and £50k would give rise to just under £190 per month.  If you wanted to keep it all at NS&I as a trusted brand where they're already an account holder, their income bonds (effectively easy access, apart from the last £500) pay 3.59% monthly, so the £50k there would yield £150 / month.

Thanks for your very helpful reply.   
In particular, I had no idea that not all accounts can be managed under an LPA.

BooJewels

pthompson said:

BooJewels said:

LHW99 said:

Use a fixed rate ISA (maybe 2 year) for £20k of the C/A money. Look at which banks / building societies are available / reasonably accessible by the person with PoA.

Many smaller (local) societies can offer passbook accounts (not top interest rates but FSCS covered), although maybe not on fixed rate ISA's, so the rest could go into a non-ISA postal 6 month or one year account, and could be swapped to an ISA after next April.

For an elderly person, I would personally not go with one of the modern providers (Chip, Raisin etc) as the person won't have heard of them, and even with PoA you do have to take account of their preferences if they are in any way capable. A more traditionally accessed account will mean they have paperwork to reassure them the money is being looked after, whenever they feel it necessary to check.

You also need to consider which providers even allow accounts to be managed under an LPA - not all do - and they often have specific opening requirements for PoA managed accounts - such as a paper application, rather than on-line etc.  This is where more mainstream accounts might prove more suitable.

If the chap is reluctant to spend his savings, maybe suggest that he puts the principle of his savings into an account that pays out monthly interest to their usual current account - that would give them some extra spending money each month without reducing the principle. 

For arguments sake, just to illustrate, because I know that Ford Money allow LPA accounts - they've recently added a 2 year fix which pays 4.65% monthly - if they were to put £50k into that - it would pay out just under £200 per month - that could make their life more comfortable as they go along.  If they didn't want to lock away the funds for 2 years, even their flexible saver pays 4.51% monthly and £50k would give rise to just under £190 per month.  If you wanted to keep it all at NS&I as a trusted brand where they're already an account holder, their income bonds (effectively easy access, apart from the last £500) pay 3.59% monthly, so the £50k there would yield £150 / month.

Thanks for your very helpful reply.   
In particular, I had no idea that not all accounts can be managed under an LPA.

You're very welcome.  Having been an active attorney twice recently, I found that just because the LPA makes things possible, it doesn't always make them easy.  Savings accounts in particular seem to be a bit more problematic to operate than say current accounts - which can also vary quite a bit too.  

I had a look for a friend recently and I've now found my scrap of paper where I made notes at the time - Ford, as mentioned allow LPA accounts, as do NS&I - but also Charter Savings Bank - but they say to ring them to discuss, as not all accounts can be - their easy access account is a minimum opening balance of £5k, paying 4.82% monthly (£50k = £200.83/month) and they have 1 year fixes paying a smidge more.  Shawbrook say they allow LPA accounts, but by paper application and I think Hodge Savings Bank might do too, as I think do Vanquis.  There will be others too of course, but those were ones I specifically looked at recently that met other criteria - like paying monthly.  There are also notice accounts too that usually pay a little bit more, but you need to give notice to be able to withdraw funds - Shawbrook offer a 45 days notice account that pays a little over 5% monthly.

You need (or the Attorney will) to read the T&C carefully for each account you're interested in, as the details vary and you'll need to ensure that they meet the required criteria.