House sale funds - Savings/investment advice

borischelski

This week we sold our family home following our 92 year old mother with dementia moving into a private care home.

The 920k proceeds are currently sitting in her bank account. My sister & I both have POA & are conscious that within the next 6 months we need to move the funds & spread out across a series of min 8 (unconnected) savings accounts. Or placed in some sort of investment fund.

We will need to take out appx £25k each year to fund a gap in our mothers care costs. Other than that we will have no short term need to dip into these funds.

I would appreciate any advice as to how my sister & I can best manage our mothers funds, balancing fund security with investment potential

Mark_d

I think the simplest thing would be to move the money into a NS&I savings account.  You get complete protection for the money and the interest each year should yield plenty to cover the care costs.

Yorkie1

Investing is generally said to be for the long-term (10+ years).

Given your mother's age, it may be more prudent to focus on cash savings rather than stocks and shares.

This could be fixed term bonds of different lengths, cash ISA (though you won't make much of a dent into £920K each year) etc.. I agree that NS&I's safety for amounts of > £85K would mean you don't have to open 12+ other accounts instead, even if the interest rates are poorer there than the headline rates elsewhere.

It might also be worth thinking about whether your mother's care needs will increase over the coming months and years, so that £25K (even without inflation) is no longer sufficient to provide for her care. It therefore might be prudent to retain a certain amount in easy access rather than putting it all into accounts which require notice or cannot be accessed until the end of the fixed term.

Bear in mind that your mother is likely to earn > £10K interest each year (£920K * 3% = £27,600) and you are therefore likely to need to complete a self-assessment income tax return for her in due course. The more accounts you have, the more you need to keep track of.