Where should we invest £100,000 from the sale of my mother’s house?

admin
17 November 2015

Q

We are currently in the process of selling my mother’s house. She is 80 years old and downsizing into a flat that is better suited to her needs.The house sale is expected to produce £100,000, which will be needed to cover her care in the future.We would like to invest this money in my mother’s name until she needs it.Where would you recommend we invest it to get the maximum return for her with minimal tax implications?
From
RR/Redcar

A

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.