£145,000 to invest

docrobo

My mum has just got £145,000 from the sale of her house after my dad has just recently died. She needs £500 amonth to pay her out goings. She would like to do this from the interest earned from the money from the sale of her house, plus maybe a little extra to spend as well on top of her pension. She would also like to have access to the money if she needed to. Does anybody have an advice to which bank account or savings account would be best suited which will give her what she needs.

Ian_W

How old is your mum?
How much is her other income from the pension and any other sources?
Not just being nosey but if she has to pay tax on most or all of the interest she may struggle to get £500pm + a bit extra to supplement pension + beat inflation so her capital is growing.
If her capital doesn't grow ahead of inflation then her income in real terms spending power will reduce quite quickly.

jamesd

docrobo, for the short term the best savings account article will give suggestions and the money can be split among several of them. Longer term this is grossly inadequate because after allowing for inflation you can only take 1-2% of the investment value as income and at 2% that's only 242 a month before tax. It's OK to take more for a year or two while she gets organised but not good to do it for longer than that.

What she should do is find an IFA using the service at unbiased.co.uk and seek advice. Then people here can review that advice to check that it looks appropriate. What they will recommend is a combination of investments that is expected to produce an income in the 5-7%+ range before tax after fees and inflation and that will meet her needs.

Instead of using investments (which is likely to be the best choice if she can accept the ups and downs in capital value) she could purchase one of several types of annuity to provide the income. This would have the advantage of certainty of no ups and downs but would probably provide lower income overall. It would still be a lot better than using a savings account, though she should ensure that she retains some capital for unexpected large needs like paying for nursing care later in life.