Investing savings

Property is a long-term investment, especially when the housing market is still depressed, although, of course, that's a good time to buy. However, being realistic, your mother may not have much time left. When she dies, the property will almost certainly have to be sold, especially if all savings have been converted to property so there is nothing liquid to pay inheritance tax (40%). There is no predicting when the market will improve.

Even if rental property is in good condition to begin with, it also involves quite a bit of maintenance and organisation. This can be handled by an agent but they do charge for every last thing they do on top of their commission. However, agents will also advertise the property, show viewers round it and do credit checks on potential tenants.

It's a tricky decision ChrisGollins with interest rates on savings in the doldrums. There is no easy solution. Good luck.

Chris if your mother's savings are substantial you really need an IFA.
Yes they cost money, but we have found that it's money well spent.
We use Hargreaves Lansdown. Not advertising, just a satisfied client.

Chris whatever you do I think you should bear in mind that the care home will need to be paid for as long as you Mother lives so you do need to have enough liquidity to cover that.

You will also need to allow for IHT at 40% when she dies.

If that all means that you still have money to invest then I read just last week that the rental market is doing well and expected to continue to do so while house prices are stagnant.

I do think you should prepare a speadsheet of her assets and how long there is still to go on any fixed investments and then go and see an IFA.

Good luck It must be quite a task if you are not the financial type.

if you invest in property then when you come to sell you would also be liable pay capital gains tax.

Like jane I use Hargreaves Lansdown. I invested my savings with them to produce an income and so far have to say I am very satisfied with them. You can have a free initial interview with them and I found there was no hard sell just an honest appraisal of what they could achieve (in fact they have achieved more than they quoted).

Seconded. About HL.

Thirded.

I think you have got to be careful about investing in property under your circumstances as it is unknown how long your mother will live and what the rental market will be like in the long term.
I have a friend in London who was told his mother would live for about a year to 18 months in 2006.
The mother was still alive when I spoke to him just after christmas.

I understand there are some insurance annuities where you pay a lump sum to the insurance company and the company pays the care home fees for as long as the person lives.

It may be worth asking a financial advisor about them.

Also it may be worth looking at NHS funding.
You do often argue to get this.
I do know of a case where a son was asked to sell his house to fund his fathers care as the house was worth about £800,000 and Social Services said he did not need that size house as he was living on his own.
This was completely unlawful and it was later found the father was entitled to full NHS funding.

Frank

And Hargreaves Lansdown answer the phone -straight away with a really helpful person.Moved to them almost completely now.

When I had Hargreaves Lansdown visit me for my initial review, he advised that I NOT invest everything with them! He recommended I keep around one third of my savings elsewhere along the lines of not putting all your eggs in one basket. They have performed so well that I am thinking of moving almost all my savings to them.

(There is a danger of this thread turning into an ad for HL! but honestly I am just a satisfied client)

Another problem I have just thought of is you say your mother has substantial savings.
You have not given a figure but lets say it is £300,000 for ilustration purposes.
If you buy property for that amount and the market falls so they are only worth £200,000 and your mother lives for a long time £200,000 could be used for care fees.
I am just wondering if Social Services may try to hold you liable for the £100,000 loss?.
Can anybody else advise?,

Frank