advice for elderly relative - earning monthly interest on savings

petalclark

Hi All

First time posting so I hope you can help with some good advice.

An elderly relative has £50,000 of savings and uses the interest as a monthly income. She currently has a Nationwide Monthly Income 60+ which has an AER of 5.07% and Gross P.A of 4.96%

http://www.nationwide.co.uk/pdf/savi...essSavings.pdf

Is this the best place for her money? Could she achieve better interest elsewhere for monthly interest?

Is it the safest place for her money? She is particularly concerned for the recent Northern Rock crisis and has concerns for how much of her money is safe and how best to split it and still achieve the same monthly interest if not higher.

Appreciate your comments & advice!

Kind regards
Petal

dunstonh

Is this the best place for her money?

It depends on her age and expected life expectancy and her tax position.

Could she achieve better interest elsewhere for monthly interest?

Yes.

Is it the safest place for her money?

Apart from inflation eating into the money reducing its real value thereiis nothing wrong with Nationwide.

She is particularly concerned for the recent Northern Rock crisis and has concerns for how much of her money is safe and how best to split it and still achieve the same monthly interest if not higher.

Tell her to ignore that. Its media driven sensationalism. The Northern Rock "crisis" had more to do with the Govt's inability to handle it rather than anything else. Just some months earlier the Govt blocked a move by LloydsTSB to buy it. Had they allowed it then there would never have been the issues. She hasnt seen a retail bank go under in her lifetime and she isnt going to. Plus the Govt has sort of set a precedent now.

EdInvestor

petalclark wrote: »

Is it the safest place for her money?

The awaqrd for safest goes to two candidates - National Savings and Investments, and Northern Rock, both owned by the Government.

She is particularly concerned for the recent Northern Rock crisis and has concerns for how much of her money is safe and how best to split it and still achieve the same monthly interest if not higher.

35k is guaranteed by the FSCS, so she probably best to put half of it somewhere else.See the Savings article for best interest rate alternatives.