Low Risk Savings (Parent)

[sausage76]

Needing a bit of advice.

My mom has got a sizeable amount of money that is just sat in her bank savings account >150k.

She's got a couple of ISA's set up and so what to do with this other amount.

She is not interested in stocks and shares and its something I would be helping her set up.

I've been looking at NS&I products and think for her the Guaranteed Growth Bonds are a suitable product. Could split the amount into a couple of accounts over a shorter and longer period.

Are there any other areas/accounts worth looking at?

[steveo3002]

premium bonds are safe and might win big (or not) dump 50k if she wants to

[okgo]

sausage76 said:

Needing a bit of advice.

My mom has got a sizeable amount of money that is just sat in her bank savings account >150k.

She's got a couple of ISA's set up and so what to do with this other amount.

She is not interested in stocks and shares and its something I would be helping her set up.

I've been looking at NS&I products and think for her the Guaranteed Growth Bonds are a suitable product. Could split the amount into a couple of accounts over a shorter and longer period.

Are there any other areas/accounts worth looking at?

What do you mean by 'couple of ISA's set up?"

This is probably less simple than you think in terms of inflation erosion, PSA, pension situation, mortgage situation etc etc

[xeny]

Is she low enough income that tax on the interest won't be an issue?

If not, low coupon gilts are worth considering, and if held to maturity the risk is very comparable to a cash savings account.

[alscar]

sausage76 said:

Needing a bit of advice.

My mom has got a sizeable amount of money that is just sat in her bank savings account >150k.

She's got a couple of ISA's set up and so what to do with this other amount.

She is not interested in stocks and shares and its something I would be helping her set up.

I've been looking at NS&I products and think for her the Guaranteed Growth Bonds are a suitable product. Could split the amount into a couple of accounts over a shorter and longer period.

Are there any other areas/accounts worth looking at?

Sounds similar to my Mum.
Assume you have LPA in place to be able to assist her ?
I put Mums money in a combi of Premium Bonds , Fixed term bonds ( usually 12 months ) and a combi then of instant access v notice period / limited access accounts.

[sausage76]

alscar said:

Sounds similar to my Mum.
Assume you have LPA in place to be able to assist her ?
I put Mums money in a combi of Premium Bonds , Fixed term bonds ( usually 12 months ) and a combi then of instant access v notice period / limited access accounts.

Thanks for that. I am jsut seeing what options she has at the moment and would be best for her.

Then the fun part of trying to explain it all to her

[sausage76]

okgo said:

What do you mean by 'couple of ISA's set up?"

This is probably less simple than you think in terms of inflation erosion, PSA, pension situation, mortgage situation etc etc

Well she has 2 ISA's that she add to this year both max amounts she could, as advised by her bank.

She ahs no mortgage, state pension plus what was my dads pension.

All I am trying to do is get her a bit more interest on her money and not have her worried about it going wrong.

[alscar]

sausage76 said:

alscar said:

Sounds similar to my Mum.
Assume you have LPA in place to be able to assist her ?
I put Mums money in a combi of Premium Bonds , Fixed term bonds ( usually 12 months ) and a combi then of instant access v notice period / limited access accounts.

Thanks for that. I am jsut seeing what options she has at the moment and would be best for her.

Then the fun part of trying to explain it all to her

Indeed one advantage of having LPA ( sadly Mum has Alzheimer’s ) is that I can just go already and plan what I think she needs without having to explain it all which of course she would forget by the end of the call anyway.
KISS principles should apply if no risk wanted by her.
Some accounts are in effect online only which might also be something to consider if your Mum isn’t keen.

[Greenmantle]

xeny said:

Is she low enough income that tax on the interest won't be an issue?

If not, low coupon gilts are worth considering, and if held to maturity the risk is very comparable to a cash savings account.

agreed
anyone who has a state pension will be paying a certain amount of tax on savings
eg
state pension £12700 + £4500 in savings interest will lead to a tax bill of £700.

[xeny]

Greenmantle said:

xeny said:

Is she low enough income that tax on the interest won't be an issue?

If not, low coupon gilts are worth considering, and if held to maturity the risk is very comparable to a cash savings account.

agreed
anyone who has a state pension will be paying a certain amount of tax on savings
eg
state pension £12700 + £4500 in savings interest will lead to a tax bill of £700.

Not quite that bad - there's the "starting rate for savings" https://www.moneysavingexpert.com/savings/tax-free... but that tapers really sharply as income rises above the personal allowance.

[butchstewie]

Realistically if your mum is happy with savings and you don't want to rock the boat or risk any sort of "why did you do that?" conversation down the line I would say NS&I won't set the world on fire with their rates but it's totally safe and totally defensible IMO.

[C69]

sausage76 said:

Are there any other areas/accounts worth looking at?

Really the short answer is any savings account that's FSCS-protected is low-risk. I think I'd first establish how much of the £150k+ she's happy to lock away in fixed-term savings accounts, and how much of it she's likely to need for day-to-day expenditure (i.e. easy access).

Then you'd need to shop around for the best rates. However, your choice will be restricted if she's only happy dealing with High Street banks or NS&I. Also, would she be comfortable with internet-only accounts, or does she prefer doing everything in person at a bank branch?

sausage76 said:

Well she has 2 ISA's that she add to this year both max amounts she could, as advised by her bank.

If the ISAs are with the bank that advised her to open them, then the rates might not be brilliant. Do you know what they are?

[Skyedriver]

sausage76 said:

Thanks for that. I am jsut seeing what options she has at the moment and would be best for her.

Then the fun part of trying to explain it all to her

you're in the same situation that I am with my wife. Inheritance incoming has cash ISA but the rest will be in one bank which will exceed the £125K risk insurance. She's dead against S&S, not sure about Bonds, will take more notice of the lady in the bank than me.

[alscar]

Skyedriver said:

you're in the same situation that I am with my wife. Inheritance incoming has cash ISA but the rest will be in one bank which will exceed the £125K risk insurance. She's dead against S&S, not sure about Bonds, will take more notice of the lady in the bank than me.

Inheritances with one Bank are protected under the FCS guarantee up to £1.4m ( up from £120k ) for 6 months under the temporary balance category.

[Skyedriver]

alscar said:

Skyedriver said:

you're in the same situation that I am with my wife. Inheritance incoming has cash ISA but the rest will be in one bank which will exceed the £125K risk insurance. She's dead against S&S, not sure about Bonds, will take more notice of the lady in the bank than me.

Inheritances with one Bank are protected under the FCS guarantee up to £1.4m ( up from £120k ) for 6 months under the temporary balance category.

thanks , some breathing space then. Beginning to think maybe see an IFA if I knew one up here I could trust (and that she would trust)

[alscar]

Skyedriver said:

thanks , some breathing space then. Beginning to think maybe see an IFA if I knew one up here I could trust (and that she would trust)

Maybe suggest she looks at the likes of Martin Lewis's website ( MSE ) just to get an idea of different savings products.
If she isn't the slightest bit interested in SS then perhaps a combi of 12 months fixed term bonds , limited access accounts and even instant access - I saw earlier that RCI Bank was offering the latter at 3.95% for instance.
At the very least you might be able to persuade her to invest a small amount in say a Tracker Fund just to give her an idea ?
I can't say my wife is particularly interested in investing and saving so is happy to just leave it up to me.
She is very accomplished at spending though.

[The Gauge]

Premium bonds might be something she is comfortable with, the money is 100% safe and she has some excitement in the anticipation of a win

Depending on what kind of relationship you have with your mum, consider this as an opportune time for having a chat with her about all of her finances and try and compile a list of everything he has. This will greatly help you when you are sorting her financial affairs when she is no longer here.

When my mum did she had already given us her box of financial paperwork and I had compiled a list of every financial product she had, including all of her income streams - pensions, attendance allowance etc. When the day came it made things much so much easier when notifying all the financial organisations and to freeze accounts etc. Plus I was able to obtain the 'value on date of death' for her accounts which proved vital when submitting inheritance tax forms and probate.

You don't need all the account numbers etc (but beneficial if you have them), just the organisation and the product eg a trust with Canada Life, an ISA with Santander etc

[Skyedriver]

alscar said:

Skyedriver said:

thanks , some breathing space then. Beginning to think maybe see an IFA if I knew one up here I could trust (and that she would trust)

Maybe suggest she looks at the likes of Martin Lewis's website ( MSE ) just to get an idea of different savings products.
If she isn't the slightest bit interested in SS then perhaps a combi of 12 months fixed term bonds , limited access accounts and even instant access - I saw earlier that RCI Bank was offering the latter at 3.95% for instance.
At the very least you might be able to persuade her to invest a small amount in say a Tracker Fund just to give her an idea ?
I can't say my wife is particularly interested in investing and saving so is happy to just leave it up to me.
She is very accomplished at spending though.

Can't see her interested in a Tracker either. Her friend lost money in the 2008/9 "crash" which is more important than me telling her that long term she'd be better off - oh never mind! I manage my own Isa and SIPP and joint accounts, and my son's ISA and LISA as he's not financially aware (too busy with his Uni degree course. To start and try to sort my wife's new stuff as well when I'm up against a brick wall is a step too far. She asks advice and then ignores it.