Investing parents money from house sale.

badmemory

A lot of banks do not get the correct available interest year but NS&I do.  Always worth bearing in mind.

Winchmore_Hill_Shot

xylophone said:

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?

I think so, that is next on the list to investigate.  Dad gets the care component.  Not used this year's ISA allowance but will do.

Winchmore_Hill_Shot

Bobziz said:

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.

That's helpful.  Thank you.

CarolWHerts

We were in almost the same situation and this is what I learned. There's a lot to be said for keeping things simple.

We did have full PoA in place that they sensibly set up years ago.

We put the maximum in premium bonds for both parents. Then a lump sum in a NS&I direct saver, feeding interest into the current account. Because I also have NS&I savings I can see all these accounts together through my smartphone app (and there is always some fun on prize day because Dad, with his dementia, never remembers that he's got the bonds and is always delighted with the wins, especially when we tell him they are tax free!). NS&I are a bit clunky to deal with using PoAs, still having an addiction to paper correspondence for some things, but we got there in the end without undue difficulty.

In respect of banking, it helped enormously that both my parents and I both already used Santander, whose systems and people have both been great. Various ISAs and savings accounts feed the current account. Again, I can see everything together on the Santander app (as can my sister, their other attorney, which keeps things nice and transparent). There is the occasional roadblock requiring a branch visit, e.g. when Santander have made product changes and recommend changing to new accounts, which always seem to require new ID checks, but the staff in these situations have always been more than helpful. So I'd recommend a bank where they already know you and where you can get to a branch maybe once a year if needed. 

I did a lot of research into immediate care needs annuities when they first went into the care home. One financial advantage of these is that the nominal interest on the sum you hand over is technically tax free, as long as the proceeds are paid directly to the care providers, although this is all rolled up into the calculations. But this is just one factor affecting the 'is it worth it' calculations. We decided eventually not to go down this route because: 1. there was quite a lot of money available in relation to their ages (about 10 years of fees and they were 88 and 91 at the time) 2. inheritance was not a big thing for us and, 3. as a family we did have the resources to continue paying their fees should the money run out. I did do some quite complex modelling on the various scenarios and options here so that I understood the risks and benefits in full, and used a specialist advisor to get quotes to work with, even though we didn't buy in the end. 

The other thing I learned is that things can change in an instant. Although my parents seemed doggedly determined to go on forever, my mother died two years after entering the home. My father, now 93, does indeed appear to be immortal, as he always maintained, so we'll see how that goes. My mother's death completely changed the calculations on how long the money would last. It also made me thankful that we had gone down the 'keep it simple' route as the last thing you want is additional 'sadmin' on top of everything else that needs to be done. The last few years of your parents' lives are going to be hard on you anyway in this situation so, beyond the obvious responsibility to ensure that their finances are working well enough, it's not the time to be introducing too many new things to stress about. This obviously depends on you and where your feelings, interests and talents lie.

I hope all works well for the OP. 

badmemory

I must say that I found the banks I already dealt with, that my mother also did too, much easier to deal with than the ones only used by her.  One in particular always wanted things done in branch & which at first meant taking time off work, I soon moved.  I have heard they are better now, but it does show the difficulties you can have.

Winchmore_Hill_Shot

CarolWHerts said:

We were in almost the same situation and this is what I learned. There's a lot to be said for keeping things simple.

We did have full PoA in place that they sensibly set up years ago.

We put the maximum in premium bonds for both parents. Then a lump sum in a NS&I direct saver, feeding interest into the current account. Because I also have NS&I savings I can see all these accounts together through my smartphone app (and there is always some fun on prize day because Dad, with his dementia, never remembers that he's got the bonds and is always delighted with the wins, especially when we tell him they are tax free!). NS&I are a bit clunky to deal with using PoAs, still having an addiction to paper correspondence for some things, but we got there in the end without undue difficulty.

In respect of banking, it helped enormously that both my parents and I both already used Santander, whose systems and people have both been great. Various ISAs and savings accounts feed the current account. Again, I can see everything together on the Santander app (as can my sister, their other attorney, which keeps things nice and transparent). There is the occasional roadblock requiring a branch visit, e.g. when Santander have made product changes and recommend changing to new accounts, which always seem to require new ID checks, but the staff in these situations have always been more than helpful. So I'd recommend a bank where they already know you and where you can get to a branch maybe once a year if needed. 

I did a lot of research into immediate care needs annuities when they first went into the care home. One financial advantage of these is that the nominal interest on the sum you hand over is technically tax free, as long as the proceeds are paid directly to the care providers, although this is all rolled up into the calculations. But this is just one factor affecting the 'is it worth it' calculations. We decided eventually not to go down this route because: 1. there was quite a lot of money available in relation to their ages (about 10 years of fees and they were 88 and 91 at the time) 2. inheritance was not a big thing for us and, 3. as a family we did have the resources to continue paying their fees should the money run out. I did do some quite complex modelling on the various scenarios and options here so that I understood the risks and benefits in full, and used a specialist advisor to get quotes to work with, even though we didn't buy in the end. 

The other thing I learned is that things can change in an instant. Although my parents seemed doggedly determined to go on forever, my mother died two years after entering the home. My father, now 93, does indeed appear to be immortal, as he always maintained, so we'll see how that goes. My mother's death completely changed the calculations on how long the money would last. It also made me thankful that we had gone down the 'keep it simple' route as the last thing you want is additional 'sadmin' on top of everything else that needs to be done. The last few years of your parents' lives are going to be hard on you anyway in this situation so, beyond the obvious responsibility to ensure that their finances are working well enough, it's not the time to be introducing too many new things to stress about. This obviously depends on you and where your feelings, interests and talents lie.

I hope all works well for the OP. 

Thank you so much.  Really helpful.

Winchmore_Hill_Shot

badmemory said:

I must say that I found the banks I already dealt with, that my mother also did too, much easier to deal with than the ones only used by her.  One in particular always wanted things done in branch & which at first meant taking time off work, I soon moved.  I have heard they are better now, but it does show the difficulties you can have.

Yes, we've found the same.