Investing parents money from house sale.

Albermarle

Winchmore_Hill_Shot said:

Thanks everyone, really helpful.  I probably wasn't overly clear in what I was asking.  Ultimately, it is about ensuring that we use the money well to ensure to ensure that we can fund the care home for as long as possible.  As far as we are concerned, anything left after that is a bonus.  I had assumed it would be a mix of fixed term bonds rather than investments (both were too risk averse for that).  Dad is already maxed out on PBs.

The amount of money we are talking about here is way beyond my experience.  Given the £85k protection limit, I assume it is worth spreading the money across different banks?  Does anyone know how easy it is to set up such accounts when working with a PoA?  Up until now, some financial institutions have been far easier to work with than others.

In your thread title you used the word investing, which to most people means stocks and shares etc. as opposed to savings. It is a common confusion.

Also be aware that the word 'bond' can mean many different things, and is often used by scammers offering 'bonds' with high rates of return, as well as being used by more legitimate financial providers.
I think most ( but not all ) savings providers have stopped using the term for their fixed rate savings accounts.

southone

Bigwheels1111 said:

NS&I will give a lower rate, but its Gov based so the whole amount will be covered..

There have been many threads on here about this, can find them at the moment, people listing who take POA in the case.

NS&I (with monthly interest paid to your bill paying account) was my thought as well you also need to take into account that needs may change in the next number of years that you've assessed and costs of care home may go up as well

tetrarch

This sounds like this is not an "investing" decision but a savings and tax-optimisation question.

Hiring an IFA sounds like a bit of overkill.

Fully using your parents ISA allowances and a mixture of term deposits you could manage this cash portfolio yourself. Use joint accounts where possible (not ISA obviously) as this will make things easier in the future

Personally, and this is my personal opinion, I don't worry about the £85K limit. - as long as you stick to regulated names that you know.

You've certainly come to the right place to get best buys and advice. The tax optimisation may be a bit more work but not impossible

Best of luck

Regards

Tet

Keep_pedalling

The term investing is often incorrectly used by forum users when they really mean maximising interest.

An IFA might be useful to investigate the possibility of purchasing an immediate needs annuity for one or both parents.

Bobziz

Are either of them or might they become higher rate tax payers with savings interest on £700k ?

Winchmore_Hill_Shot

Thanks again everyone and yes I was using investing in terms of maximising interest.  Their pension income is only £20k for the two of them, although dad is about 60% of that.  Dad is getting AA and their interest last year was about £5k each.  Both of them have ISA's and Dad is maxed out on PBs.

I guess I would rather stick with the 3 or so banks they are currently using, so may well go above the 85k limit.  NS&I sounds like something I should investigate.

It sounds like I probably need to do similar to what I have been doing over the past year or so since I took on responsibility for managing their money.

I've not come across an immediate needs annuity, so I will check that out.

badmemory

Your mother should also be entitled to AA.  The manager of the care home my mother went into said that very very few people who go into a care home are not entitled to AA and mostly at the full rate.  She said the only one she had come across was a man who had always had women taking care of him & had no idea even how to make a cup of tea & was going out every day & was still well able to drive & did.  The home may help with filling the forms if you are lucky.

Hoenir

There are products available such as Immediate Care Annuities. Whether such a product would be viable really needs to be delved into. 

xylophone

Dad is getting AA 

Surely your mother is also entitled to AA in view of her condition?

Is either parent ( or are both) entitled to the nursing care component?

The ISA allowance is used to the full for each parent?

Bobziz

If you go for multi year fixed rate bonds then worth doing the calculations to see whether interest payments if paid on maturity might push either into higher rate tax. If that might be the case then go for bonds that pay out annually.