True, if it is paid into a seperate account as stated is required. Not true if its paid back into the same account on a monthly basis as you then get compounded interest.
The thing with "The Internet" and especially OCUK (and talking to Billy down the pub) is that whenever there is a financial post, people reply with things that suit their own circumstances and beliefs, not accounting for the fact that different people have different financial needs and wants (which is why I am always careful to never recommend anything) - The problem with the OCUK demographic is that the majority are not financial experts, have no knowledge of financial planning, do not know the complexities of even the most basic of financial products and to some extent are of a generation that just rate chase without properly assessing what is actually best for them and considering all the implications of what they do. This often results in some shocking posts, although I see them mostly in the weekly "what mortgage should I go for" threads rather than ones on savings, which I find immensley frustrating. Almost every financial post I see on here I can easily pick holes in, but I choose not to as I would end up spending hours doing it and in too many arguments and most of the time people still insist on being correct (which for their own circumstance they might be) even when I know they are not, making it futile.
Have you even considered that this persons mother might use their savings as their source of income? Many, especially older / retired people NEED monthly interest to be paid to them as it is what they live off. Someone who is 25 and working doesn't need that and so annual interest MAY be better (if compunding still doesnt give a greater EAR), but doesn't mean its BEST for all.
Anyway, getting off my soapbox now - Hopefully some more people can contribute who have opened up products recently that the OP's mother can consider if they are appropriate.
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