Helping my parents - Savings accounts.

TrebzUK

Hi all

I'm trying to help my ageing parents manage their money a little better. They are very old school so I'm struggling. They recently sold their house and moved into a secure rented apartment. They have 100k left over after paying off the remainder of their mortgage. My mother insists on keeping the whole of the 100k in her current account. I'm obviously very uncomfortable with her doing this. I have finally convinced them to put 50k away in something like an ISA and keep 50k in their current account (To keep my mother happy). When I have proven to them that they do not need 100k in their current account I'll try and have them move a further 40k, leaving them with 10k in their current account.

What would be the best course of action do you think? I have an ISA with Virgin myself and I'm happy with their services. Would an ISA be the best way forward or is there a better way to save / invest their 50k.

Thank you in advance for any advice offered. I'm new to the forum so I'm hoping on getting a good solution for them.

Many thanks

eskbanker

It isn't possible to pay more than £20K into an ISA in any tax year, so if both of them open one then that would take care of £40K.

Bigwheels1111

Chip easy access at 5% would be great, all app based. There in lies the problem.
I helped my neighbours save thousands of Gas, Electricity, water, council tax, broadband, sim only, pension credits etc.
But banking and savings, was a no no.
One out of 12 had an iPad and would open accounts on it, the rest would only do it by going into their bank of 50 years and get a rate half of what I could get them.

Try, but I think you are banging your head against the wall the wall.
My wife would carry 2k around in her handbag as did not trust banks.

Cairnpapple

In the first instance, see if you can persuade them to put money into ISA/savings in their own bank. It's likely to be more palatable to them if they've used that bank for years, and even if they get 2% or 3% it's better than what they're getting now. 

Or maybe they would be OK with premium bonds?

Rich1976

Don’t forget that it is your parents money so they would have to do what they are most comfortable with. I doubt they would be happy using an unfamiliar name especially that is app only so you may be best sticking to banks or building societies they would be aware of. Many of the big building societies pay half decent rates, or you may have a local one they could used. 

Probably best to use their isa allowance first of 20k each this tax year either instant access or fixed rate or a mixture of both and then they could do the same next tax year.

the rest could go into easy access accounts or premium bonds.

Also perhaps best to go for accounts without any gimmicks such as withdrawal restrictions. If they are not used to managing their money wisely then keeping it as simple as possible would be best. 

eskbanker

TrebzUK said:

They recently sold their house and moved into a secure rented apartment. They have 100k left over after paying off the remainder of their mortgage.

Just to pick up on the move from ownership to renting, do they have sufficient monthly income to cover the rental costs or will they need to be using some of their capital for these?

FlorayG

I would recommend Premium Bonds to them because they will know what those are so should trust them, plus if they put in the maximum there's a pretty good payout rate ( not as good as the best savings accounts but just may be more easy to convince them to do this)
Old people are funny about cash. My mom always had at least £500 in the house and I never managed to convince her that she didn't need that much cash available

Flugelhorn

FlorayG said:

I would recommend Premium Bonds to them because they will know what those are so should trust them, plus if they put in the maximum there's a pretty good payout rate ( not as good as the best savings accounts but just may be more easy to convince them to do this)
Old people are funny about cash. My mom always had at least £500 in the house and I never managed to convince her that she didn't need that much cash available

can be handy - mother eventually forgot the PIN number ... cash was handy 

LHW99

Or an account with national savings NS&I.

They do Income Bonds (or growth bonds), and others including an ISA, backed by the Government.

Not the best interest, but should be familiar, and better than in a current account.

https://www.nsandi.com/products

born_again

TrebzUK said:

Hi all

I'm trying to help my ageing parents manage their money a little better. They are very old school so I'm struggling. They recently sold their house and moved into a secure rented apartment. They have 100k left over after paying off the remainder of their mortgage. My mother insists on keeping the whole of the 100k in her current account. I'm obviously very uncomfortable with her doing this. I have finally convinced them to put 50k away in something like an ISA and keep 50k in their current account (To keep my mother happy). When I have proven to them that they do not need 100k in their current account I'll try and have them move a further 40k, leaving them with 10k in their current account.

What would be the best course of action do you think? I have an ISA with Virgin myself and I'm happy with their services. Would an ISA be the best way forward or is there a better way to save / invest their 50k.

Thank you in advance for any advice offered. I'm new to the forum so I'm hoping on getting a good solution for them.

Many thanks

Is that one of these retirement villages/blocks. That can have large annual payments for upkeep?

TrebzUK

eskbanker said:

TrebzUK said:

They recently sold their house and moved into a secure rented apartment. They have 100k left over after paying off the remainder of their mortgage.

Just to pick up on the move from ownership to renting, do they have sufficient monthly income to cover the rental costs or will they need to be using some of their capital for these?

Yes, they have a monthly pension payment which covers their day to day out living costs. The 100k is surplus to requirements really and is just sat there in the current account, not earning any interest for them.