£100k to invest

[Wacky Racer]

No, not me unfortunately

A close relative (nearly 90) has had an inheritance from a family member.

Mindful of the £85k government guarantee, he would like to invest the money in a one or two year bond, not bothered about easy access, (Maybe once a year)

He is not interested in dabbling in stocks and shares, and his ISA allowance is maxed out.

Had a quick google and most building societies are offering around 4,5%AER.

Any suggestions?

Thanks in anticipation.

[CLK-GTR]

I'd think 100k will be well over the limit of most bank/building society accounts? The best Nationwide rate has a limit of 10k.

If it were me I'd be looking at a short term money market fund for as long as rates stay high-ish.

[bristolbaron]

At nearly 90 I wouldn’t be investing in green bananas!

Wouldn’t the money be better distributed to family?

Edited by bristolbaron on Wednesday 10th July 10:37

[enzo_ferrari]

At that age, I’d gift it straight to my heirs to watch them enjoy it (assuming he’s already sorted).

Being mindful of IHT implications etc.

[Shnozz]

At 90 years old I’m not sure how much I’d worry about the risks to a major bank going bust in the remainder of their lifetime (and £85k of that being protected in any event).

[LeoSayer]

A gilt might be a good idea such as this one:

https://www.hl.co.uk/shares/shares-search-results/...

Pay £91.82 now and get £100 back from the government in October 2026. Gilts are exempt from capital gains tax.

Income is only 0.375% per year but that's good because it minimises income tax.

Can be part or fully sold in the interim although the price is uncertain.

The annual yield works out around 4.2% per year.

[MrBen.911]

Close Brothers have a 1 year fixed bond at 5.2% for between £10k and £2m. Two year version is 5.06%. Rates are not what they were a while back.

[Shnozz]

enzo_ferrari said:

At that age, I’d gift it straight to my heirs to watch them enjoy it (assuming he’s already sorted).

Being mindful of IHT implications etc.

Surely the IHT implications at 90 years old are exactly the reason why that isn’t so simple? Not many make 97.

[alscar]

Assuming all in one place RCI Bank offering a 95 day access account at 4.95%.

[silentbrown]

CLK-GTR said:

I'd think 100k will be well over the limit of most bank/building society accounts? The best Nationwide rate has a limit of 10k.

NS&I? 4.4%AER on bonds, £1M limit, fully protected.

Or maybe sling half into Premium Bonds for a monthly frisson

Strike that. I'd missed the "90" bit. If he really doesn't need it (and the two-year bond bit rather implies that), then a "Deed of Variation" allows the inheritance to be passed on to someone else, avoiding IHT if that's an issue.

Edited by silentbrown on Wednesday 10th July 10:11

[RizzoTheRat]

If he's thinking of giving some away you can gift 3k/year without IHT issues so may be worth doing that straight off. If he gives more than that away inheritance tax is scaled down over time, I think it stays at 40% for 3 or 4 years and then tapers to 0% at 7 years, so if he doesn't plan to spend it in his life time he's better off giving it away ASAP.

Otherwise there's plenty of 1 year fixed rate accounts at around 5%, or easy access at a bit less (I'm getting 4.9% with Aldermore), but he'll struggle to get much more than 5%

[okgo]

Spend it. They’ll be dead soon!

[The Leaper]

A good source of information is here:

https://savingschampion.co.uk/

[Phooey]

[Wacky Racer]

Cheers for the replies so far

He already has a couple of substantial accounts with building societies paying around 5.4%.

He's a bit of a miser, he won't turn the water heating on, unless he needs a shower so if he needs a bowl of water to wash up, he switches the kettle on.

He was going to sack the window cleaner because he was going to put it up from £6 to £8 per visit, until I told him not to be silly

[Dr Mike Oxgreen]

Surely at 90 there are two obvious ways of investing £100k.

1) Coke
2) Hookers

[mark-3bw80]

Whack the lot on Enger-land losing tonight

[trevalvole]

Wacky Racer said:

Mindful of the £85k government guarantee, he would like to invest the money in a one or two year bond, not bothered about easy access, (Maybe once a year)

Presumably he is aware that he won't be able to access the money during the term of the bond? One advantage of Gilts as mentioned above, is that he can get to the money if he needs it, though the price he gets will have an element of uncertainty, but with the prospect of falling bank rates, most likely there would be a capital gain.

[NDA]

Wacky Racer said:

Cheers for the replies so far

He already has a couple of substantial accounts with building societies paying around 5.4%.

He's a bit of a miser, he won't turn the water heating on, unless he needs a shower so if he needs a bowl of water to wash up, he switches the kettle on.

There are many of his age (90 or so) who are quite miserly - it's their generation... rationing etc.

As you're a close relative I would echo the gift giving sentiments above... if he won't do that, ensure that the money is not locked away and is easily accessed when the inevitable happens. Make sure there's an easy paper-trail to follow.

I'd put it in 5% savings account. Nothing more complex than that.

[leef44]

silentbrown said:

CLK-GTR said:

I'd think 100k will be well over the limit of most bank/building society accounts? The best Nationwide rate has a limit of 10k.

NS&I? 4.4%AER on bonds, £1M limit, fully protected.

Or maybe sling half into Premium Bonds for a monthly frisson

Strike that. I'd missed the "90" bit. If he really doesn't need it (and the two-year bond bit rather implies that), then a "Deed of Variation" allows the inheritance to be passed on to someone else, avoiding IHT if that's an issue.

Edited by silentbrown on Wednesday 10th July 10:11

I think this is the most sensible answer given the need for money protection and no equity funds. That is, give it away now using DoV otherwise put it in NSI.