Savings (around £130k)

[Martynt74]

My mother in law has recently sold her house, paid off her mortgage and bought a new house which has left her with about £130k. She's also got a holiday home she's looking to sell for around £60k which will leave her with close to £200k if it sells.

From what i remember the Government security thing only covers individual accounts to about £85k, so i've told her at the bare minimum she's best to split this over 3 seperate accounts.

She doesn't really want to take many risks and would like it to be fairly liquid as other than the odd incomings such as pension, little bits of work she’s relying on this to live on.

Given the amount of money, is it worth speaking to an IFA to see what they recommend or given the lack of risk is it best to just spread it over 3 savings accounts and dip into each one as is needed?

 

[HarryPainful]

Put it all on red.

 

[Hades]

It's worth speaking to an IFA although they will advise her to keep some in low risk accounts, utilitse ISA's, etc but will also suggest she puts some into medium risk investments. Keep in mind that they get their commission from selling products so are unlikely to recommend just keeping it in one/several accounts as they won't make much (any?) commission.

But no harm in talking to them (suggest you go with her to stop her signing on the dotted line straight away).

 

[gizmoy2k]

Id say IFA mate

Saving accounts rates are horrendous at the moment, she could improve them slightly if she was willing to lock a sum away for 5 or so years but even then its not much to look at

There is no reason why she couldn't take some IFA and invest in some low risk funds or divide up some safely into savings and use some on some slightly riskier investments

There is nothing to stop you managing and looking for funds yourself to keep the cost down

Its a good time to have that kinda money around for investment

Also try keep in her good books.......and the wifes
Ask her for a loan to reduce your mortgage and pay her back monthly, helps you out if she has nothing to spend it on!
Seriously

 

[jsmoke]

Buy gold and shares in Poundland.

 

[Azza]

Buy another house and rent it out.

 

[malfunkshun]

Buy gold and shares in Poundland.

You can't, easily, buy shares in poundland since it is wholly owned by some investment nubs.

 

[zakblood]

i agree with above, best money returns atm is the rental market, buy some more cheap houses and get some tenants and see the money rolling in, even on a bad year it will be loads better than any bank

 

[Rotty]

Buy another house and rent it out.

£200k invested round here will get you 4 houses and a £1600pcm income, you don't need to be local, just appoint an agent

 

[Spangles]

Rottys idea is good. Just put the money into property and have someone do all the footwork for her.

 

[Liquiduk]

It's still a risk to run no matter how the market is. I'd never thought investments in Poundland was a serious suggestion until I just thought about it.

 

[Zorgar]

Put it in a bed.. or invest in a oil rig.. get big return!

 

[Scam]

No point putting money away nowadays unless you want it to be slowly lost to inflation.

http://www.bbc.co.uk/news/business-21341301

It found that the average rate for a cash Isa, including any guaranteed bonus, stood at 1.85% in December 2012, while the average rate for a cash Isa without any bonus was 0.88%.

Both have fallen noticeably from last August when the rates stood at 2.6% and 1.42% respectively.

In both cases the rates on offer, even with the advantage of paying no income tax, were still below the current rates of inflation, whether measured by the retail prices index (RPI) or the consumer prices index (CPI).

I can see the property market staying in it's stupid state for another good few years (low mortgage rates, rents increasing year-on-year) so in my opinion you'd be daft not to join in the gravy train. Especially without the need for a mortgage.

 

[bsoltan]

You probably know this, but just in case; if she is putting it into banks she should spread it across different banking companies not just different accounts (at same banks). As you're only covered for £85k at one particular company.

http://www.moneysavingexpert.com/savings/safe-savings

 

[teenwolf]

buy a house or two and rent them out

 

[tom_nieto]

Property is the way forward unless they're decent at stocks and shares.

 

[aln]

£200k invested round here will get you 4 houses and a £1600pcm income, you don't need to be local, just appoint an agent

This is what I'd do.

 

[harshuk]

put it all on black.

 

[booyaka]

Why not speak to an IFA about it. 1st meeting shouldn't cost anything and commission is no longer allowed now after 1st Jan 2013 with the changes within the industry. It's fee based now.

That way she will not get any "high pressure sell/commission driven products"

If you don't like what you hear - move on, do you own thing.

For those people thinking that property/rental is a good idea, It's hardly a "liquid" asset that his mother is looking for.

An IFA should consider National Savings (albeit not much of note around with them at the moment due to interest rates), Cash/Stock & Shares ISA, and lower risk interest bearing assets such as gilts/bonds and income funds if she is wanting to take a monthly income from them. At least that's what I would do with my clients!

(none of the above constitutes financial advice or recommendations - it's purely for information purposes only)

 

[dowie]

Rottys idea is good. Just put the money into property and have someone do all the footwork for her.

good? erm...

investing in a risky, illiquid asset would seem to be possibly the worst advice you could give him given what he stated in the OP

She doesn't really want to take many risks and would like it to be fairly liquid