Simplest savings account for a pensioner?
Discussion
I'm doing a bit of work to help simplify my mums finances.
They are actually very simple, cash plus some investments, but the way she has historically handled cash is a bit like the shell game where it's just small pots spread over about six different bank and building society accounts each earning sod all interest moved around monthly because "I've always done it that way".
I struggle a little to get her to realise that in total together there's a decent amount of interest being missed out on for a pensioner with a limited income.
Now I'm very conscious that people have their ways of working so I'm not going to labour the point to try to push my mum into doing something she doesn't want to do but if I could get her to see that there is a world where she could use one bank account for "daily" spending and have the rest of that cash somewhere very quickly accessible but that also pays a decent interest rate where would you choose for that "somewhere very quickly accessible" place please?
Simplicity and security is key here so I was thinking perhaps just an NS&I direct saver as I don't think it's worth the hassle and stress of switching accounts all the time just to chase an extra 0.5%.
She uses ApplePay and online banking so she's no luddite.
We're "only" talking about £20K here so it's not a fortune but it's enough that she's losing out on enough to cover the odd treat.
Appreciate we have a few retirees and older members here and I think there's a bit of a psychology thing to this rather than it just being about the numbers/best rate
They are actually very simple, cash plus some investments, but the way she has historically handled cash is a bit like the shell game where it's just small pots spread over about six different bank and building society accounts each earning sod all interest moved around monthly because "I've always done it that way".
I struggle a little to get her to realise that in total together there's a decent amount of interest being missed out on for a pensioner with a limited income.
Now I'm very conscious that people have their ways of working so I'm not going to labour the point to try to push my mum into doing something she doesn't want to do but if I could get her to see that there is a world where she could use one bank account for "daily" spending and have the rest of that cash somewhere very quickly accessible but that also pays a decent interest rate where would you choose for that "somewhere very quickly accessible" place please?
Simplicity and security is key here so I was thinking perhaps just an NS&I direct saver as I don't think it's worth the hassle and stress of switching accounts all the time just to chase an extra 0.5%.
She uses ApplePay and online banking so she's no luddite.
We're "only" talking about £20K here so it's not a fortune but it's enough that she's losing out on enough to cover the odd treat.
Appreciate we have a few retirees and older members here and I think there's a bit of a psychology thing to this rather than it just being about the numbers/best rate
butchstewie said:
They are actually very simple, cash plus some investments, but the way she has historically handled cash is a bit like the shell game where it's just small pots spread over about six different bank and building society accounts each earning sod all interest moved around monthly because "I've always done it that way".
I would ask why; there was obviously a reason once. Perhaps she's worried that a bank might collapse and so lose her savings. If so you can tell her about the FSCS £120K cover. Much better to get it all into one place at 4% and get an extra £800 a year. Doesn't need to be a Cash ISA (if she's worried about complexity) because if that's her only interest she's under the £1K limit.I would also add that with her current plan she's getting poorer by 4% a year in real terms and is she happy with that?
Ford Money Flexible Saver which has consistently had reasonable interest rates and there's no "we've just issued version 55 of the account with a better interest rate". Also the security is probably a bit simpler than NS&I, who occasionally ask me for obscure bits of information, though you do have to remember that the memorable date is in DDMMYYYY format. Withdrawal requests do have to be made before 1pm on a weekday to get the money the same day, though.
https://www.fordmoney.co.uk/all-products/flexible-...
https://www.fordmoney.co.uk/all-products/flexible-...
Have you considered something like Flagstone - https://www.flagstoneim.com/
The savings are in "one place" but can be invested in different accounts depending on access terms, and interest rates.
The savings are in "one place" but can be invested in different accounts depending on access terms, and interest rates.
If you're whittling her down to one current account, make sure that the mobile banking app is fit for purpose.
I won't name names, but the bank my Mum is with needs biometric ID set up to allow any payments over £750. We've had 4 or 5 attempts to do this and failed miserably each time. She needs to pay some tradesmen for work on her house, so I figured she could just write me one large cheque and then I would pay them. Oh no you don't say the bank. She has to call them to confirm that she wrote the cheque, and she has a 30 minute window to make the call after she receives a notification before the bank then bounces the cheque. We've resorted to £750 / day for about 2 weeks. Very frustrating.
I get why they do it, but I really don't think they've thought it through.
I won't name names, but the bank my Mum is with needs biometric ID set up to allow any payments over £750. We've had 4 or 5 attempts to do this and failed miserably each time. She needs to pay some tradesmen for work on her house, so I figured she could just write me one large cheque and then I would pay them. Oh no you don't say the bank. She has to call them to confirm that she wrote the cheque, and she has a 30 minute window to make the call after she receives a notification before the bank then bounces the cheque. We've resorted to £750 / day for about 2 weeks. Very frustrating.
I get why they do it, but I really don't think they've thought it through.
Tbh moving accounts around for £100 ( which will probably reduce this year ) does seem a fair bit of hassle when your mum can already afford treats.
If she’s comfortable with her existing arrangements I would be tempted to leave alone but just stress the fact that she can already afford treats.
My Mum has just been diagnosed with Alzheimer’s so as her LPA I’m now directly running her finances which previously I had organised for her anyway - all cash in different pots some FRB’s and some instant access and PB’s at her insistence !
Her current account is with Lloyds and by organising a Club Lloyds account with automatic dd ‘s she gets interest on that.
I am forever stressing that she can afford treats.
If she’s comfortable with her existing arrangements I would be tempted to leave alone but just stress the fact that she can already afford treats.
My Mum has just been diagnosed with Alzheimer’s so as her LPA I’m now directly running her finances which previously I had organised for her anyway - all cash in different pots some FRB’s and some instant access and PB’s at her insistence !
Her current account is with Lloyds and by organising a Club Lloyds account with automatic dd ‘s she gets interest on that.
I am forever stressing that she can afford treats.
At £20k stick in a cash ISA. This is a reliable source of advice:
https://www.moneysavingexpert.com/savings/
https://www.moneysavingexpert.com/savings/
alscar said:
Tbh moving accounts around for £100 ( which will probably reduce this year ) does seem a fair bit of hassle when your mum can already afford treats.
If she s comfortable with her existing arrangements I would be tempted to leave alone but just stress the fact that she can already afford treats.
My Mum has just been diagnosed with Alzheimer s so as her LPA I m now directly running her finances which previously I had organised for her anyway - all cash in different pots some FRB s and some instant access and PB s at her insistence !
Her current account is with Lloyds and by organising a Club Lloyds account with automatic dd s she gets interest on that.
I am forever stressing that she can afford treats.
If rates stay at 3% or so v 0.01% or whatever a current account offers it's £500-600/year I think and whilst she isn't poor that's a decent chunk.If she s comfortable with her existing arrangements I would be tempted to leave alone but just stress the fact that she can already afford treats.
My Mum has just been diagnosed with Alzheimer s so as her LPA I m now directly running her finances which previously I had organised for her anyway - all cash in different pots some FRB s and some instant access and PB s at her insistence !
Her current account is with Lloyds and by organising a Club Lloyds account with automatic dd s she gets interest on that.
I am forever stressing that she can afford treats.
I do entirely agree and hopefully emphasised in the opening post that if she chooses to leave things as they are so be it.
From a discussion we had I think she has realised there's a bit of "that's how I've always done it" thing that links back to a change in personal circumstances and "I had to think about money for myself" without going into too much detail.
I've said I'll go through a few options with her but I'm absolutely not about to do anything that has her hopping from one account to another chasing an extra 0.2% here and there each time some bank does another issue of the same account.
My thinking was rather than 3 accounts with bank A and 4 accounts with bank B (I found out it's 7 accounts across 2 banks) leave one account with each as I think (TBC) leaving the account all her debits and standing orders come from would make most sense.
Then maybe NS&I for savings as not being funny but she's just not going to be messing around opening and closing accounts every few months to chase an extra tenner a year.
The amounts we're talking should all fall within personal interest allowance and her investments are all in a S&S ISA already.
I think she could end up with three nice simple buckets where it's current account, savings account, S&S ISA and if she chooses to she can move money up or down between buckets with minimal hassle.
I've said I'll sit down with her later and draw it all out as I think the penny has dropped that right now she's just moving her own money around for reasons that no longer really apply and as a result she's actually reluctant to spend money that she could spend because in her mind her "treat" account doesn't have anything in it - when that's because she hasn't transferred spare money from account #4 into it
I get it everyone is different but it just seems very overly-complicated.
butchstewie said:
If rates stay at 3% or so v 0.01% or whatever a current account offers it's £500-600/year I think and whilst she isn't poor that's a decent chunk.
I do entirely agree and hopefully emphasised in the opening post that if she chooses to leave things as they are so be it.
From a discussion we had I think she has realised there's a bit of "that's how I've always done it" thing that links back to a change in personal circumstances and "I had to think about money for myself" without going into too much detail.
I've said I'll go through a few options with her but I'm absolutely not about to do anything that has her hopping from one account to another chasing an extra 0.2% here and there each time some bank does another issue of the same account.
My thinking was rather than 3 accounts with bank A and 4 accounts with bank B (I found out it's 7 accounts across 2 banks) leave one account with each as I think (TBC) leaving the account all her debits and standing orders come from would make most sense.
I get it everyone is different but it just seems very overly-complicated.
Quite agree.I do entirely agree and hopefully emphasised in the opening post that if she chooses to leave things as they are so be it.
From a discussion we had I think she has realised there's a bit of "that's how I've always done it" thing that links back to a change in personal circumstances and "I had to think about money for myself" without going into too much detail.
I've said I'll go through a few options with her but I'm absolutely not about to do anything that has her hopping from one account to another chasing an extra 0.2% here and there each time some bank does another issue of the same account.
My thinking was rather than 3 accounts with bank A and 4 accounts with bank B (I found out it's 7 accounts across 2 banks) leave one account with each as I think (TBC) leaving the account all her debits and standing orders come from would make most sense.
I get it everyone is different but it just seems very overly-complicated.
If you were starting from scratch , one main bank account with a linked savings account ( or two if you wanted one for her treats ) would be simple enough especially if as you say she is capable of doing this herself online.
Don’t underestimate the fact that if she is happy with things as they stand change might be a tad more difficult for you to accomplish.
It sounds to me like she is in control of things as they are.
I’ll go against the grain here & say I’d leave her to it, frankly. Perhaps ask if she wants any help with things, but otherwise don’t be the interfering offspring!
Maybe, if there is a nice MSE-recommended deal (eg, Chase intro 12 month saving rate) suggest that, but it probably gives her a bit of fun controlling how she does things.
Plus: if one bank gives an issue, she has backups easily to hand.
I’ll go against the grain here & say I’d leave her to it, frankly. Perhaps ask if she wants any help with things, but otherwise don’t be the interfering offspring!
Maybe, if there is a nice MSE-recommended deal (eg, Chase intro 12 month saving rate) suggest that, but it probably gives her a bit of fun controlling how she does things.
Plus: if one bank gives an issue, she has backups easily to hand.
mikeiow said:
It sounds to me like she is in control of things as they are.
I ll go against the grain here & say I d leave her to it, frankly. Perhaps ask if she wants any help with things, but otherwise don t be the interfering offspring!
Maybe, if there is a nice MSE-recommended deal (eg, Chase intro 12 month saving rate) suggest that, but it probably gives her a bit of fun controlling how she does things.
Plus: if one bank gives an issue, she has backups easily to hand.
Totally fair points and I agree.I ll go against the grain here & say I d leave her to it, frankly. Perhaps ask if she wants any help with things, but otherwise don t be the interfering offspring!
Maybe, if there is a nice MSE-recommended deal (eg, Chase intro 12 month saving rate) suggest that, but it probably gives her a bit of fun controlling how she does things.
Plus: if one bank gives an issue, she has backups easily to hand.
I wouldn't say it's a case of in control v out of control more that there were sensible reasons for doing that way in the circumstances it was setup in when it was setup that are no longer really a benefit and arguably a detraction now.
Anyway my mum has said let's take a look as she's setup such an elaborate shell game she isn't actually entirely sure which pot is feeding which other pot herself.
We'll see where we end up but just to emphasise as the written word doesn't always capture tone or nuance - if my mum wants to leave things as they are that's how it'll stay.
Main thing is my reasoning isn't mad - as I said it isn't always easy to put yourself in someone else's shoes when you're bringing in a salary and one current account works just fine
ChrisH72 said:
Who is her main current account with?
I'd probably leave that alone but encourage her to consolidate her savings to one decent easy access saver or ISA. Depending who she is with, they might even have a savings account paying decent interest.
Lloyds.I'd probably leave that alone but encourage her to consolidate her savings to one decent easy access saver or ISA. Depending who she is with, they might even have a savings account paying decent interest.
I use them too and unless I'm missing something their rates are garbage with the usual "bonus this" and "introductory that" for anything other than normal banking.
Yes lloyds savings rates are terrible at the moment.
If she's happy banking with them maybe just keep enough in lloyds for day to day stuff and open a standard savings account elsewhere with the rest. If its under 25k she doesn't need an ISA and normal savings tend to pay a little better. The faff is that they all do this bonus rate for a year so you do need to keep switching. But it's easier to switch one account than the six she currently has.
I'm a bit old fashioned and try to keep my cash savings with banks or building societies that have a high street branch local to me. I don't mind sacrificing a small amount of interest for this and its often only a couple of 10ths of a percent anyway.
If she's happy banking with them maybe just keep enough in lloyds for day to day stuff and open a standard savings account elsewhere with the rest. If its under 25k she doesn't need an ISA and normal savings tend to pay a little better. The faff is that they all do this bonus rate for a year so you do need to keep switching. But it's easier to switch one account than the six she currently has.
I'm a bit old fashioned and try to keep my cash savings with banks or building societies that have a high street branch local to me. I don't mind sacrificing a small amount of interest for this and its often only a couple of 10ths of a percent anyway.
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