There is a very limited market for pre-funded products that can pay out if care is required. These can be expensive and inflexible and so perhaps wouldn’t be the best option in this case.
As your mother is moving into a flat, this sounds as if she is in pretty good health. So, while she wants this money available to meet future care costs, it could subsequently be used for a different purpose.
The easiest option is to keep the money in cash.This probably won’t give the maximum return but it will at least ensure that her money is still there when it is needed.To save tax efficiently, she can use her annual Isa allowance, which is currently £15,240, and then use next year’s allowance from April 2016.
Your mother could live for many more years. So there could be an argument for investing some of her money to secure better returns and keep pace with inflation over time.
She won’t want to take too much risk and should spread her money through a range of different assets including shares, fixed interest, property and cash.
Patrick Connolly is a certified financial planner for Chase de Vere.