What to do with proceeds of house sale (earmarked for nursing home)?

I was in this position with my mother. Originally she had invested her money in a few different places and I drew down the money in tranches from the investment which held the most money. I got fed up with doing that, there was a handling fee for each withdrawal, and of course investments can go up or down.

So when she had about £150k left I moved it all to her Halifax savings account. I did mull about splitting it into two due to the £85k issue, but honestly I could not be doing with the aggravation. That was several years ago and needless to say the money quickly went on care fees, and she only has £23k left now.

I completely understand the POA aggravation factor. I had to deal with several financial institutions because that was the way things were set up initially, some were great but some were hopeless. So once I took over I kept things as simple as possible.

Quite honestly go into a bank. Do not rely on a call centre to help you. They will mess you around and tell you often complete rubbish. I have done POA twice one of which was across a number of bank accounts.

NS&I are your best bet to invest. Mixture of Premimum Bonds and Direct Saver perhaps where you cna get the money immediately.There is a limit for protection - £1 m from memory. Lots of people do this. Or realistically is Nat West or Lloyds really go to go pop whilst it is being spent.I would take the risk on this if its easier.

We had to do this. As PoA I have found Barclays (my mum's bank) pretty straightforward. I did need to go once with all the documents to get the basic access I needed, and I also needed to go again when I opened a savings account to put the bulk of her money in.

Shes very elderly so the decisions i make for her are based on immediate returns, nothing long term. She once got turned down from a nursing home because she didn't have enough in cash as we hadn't sold the flat then. So therefore I have always kept most of her money in the highest interest instant access savings account I can. This is both very easy and I think a defensible decision, if not perfect. Her pension is paid into her current account for day to day expenses.

Premium Bonds are not a particularly good option. As PoA you need to be sure you are acting in the person's best interest. You could argue that their best interest is security of return, or maximising return - PBs do neither. Although the capital is fully protected.

NS&I savings bonds or savings acccount are better - known interest rates and protected up to more than you probably need.

An immediate needs care annuity is worth looking at. Guaranteed to pay for as long as you need, so a totally safe option although not necessarily the best financial value.

If you want an ordinary bank savings account, Nationwide is one of the better at dealing with PoAs and usually has decent interest rates. It will be only the 85k protection, but as PP have pointed out that only matters if the bank/building society goes under which is pretty unlikely.

It's protected for 6 months up to £1 million as a temporary high balance because of house sale so you have a bit of time to consider it.

My mum's house sold for around 600k when she went into a nursing home. My brother and I weren't comfortable with deciding what happened to so much money, so we got a financial advisor, who had some discussions with us all and then split it between various places, including Premium Bonds and investments.

@redskydarknight thank you for posting, this is useful timing and info for me too. Thanks to all those sharing ideas, info and experience.

I saved an article from The Sunday Times author Anna Bowes (in the money pages from 4 August 2024), who wrote that one effective approach is to use cash savings platforms. Insignis Cash and Flagstone were mentioned as working for power of attorney. Its described as a single application where you can view and manage all your savings accounts.

Although I’m probably going the NS&I route myself I found this useful.

It'll depend on your attitude to risk and how much there is in total.
Eg £100k, then put £50k (the max) into premium bonds and £50k into a savings account.

If you've got several multiples of £85k to deal with it depends on whether you're prepared to risk a bank going bust or prepared to stand in multiple banks taking ages to open savings accounts and dealing with the admin. You can spread it around depending on when you think the money would be needed eg using a 1-3 year bond for some of it.

Check for each how easy it is to get the money back out again when you start needing it to make monthly payments to a home for instance.

NS&I have other savings accounts too including the direct saver which can have up to 2 million deposited

I would also open an NS&I account. Government backed to an unlimited amount of money. They will be very used to dealing with POA.

They have various accounts including easy access savers, premium bonds and 1 year plus fixed savings accounts for a better interest rate. You could lock the money she won't need for a year or two in a higher interest rate account.

You can only have a max of 50k in Premium Bonds.

Yes it’s a pain in the arse but if your DH wants to open some more accounts he will have to go into a bank in person with ID and all of the relevant paperwork.

The protection is much more than 85k in some circumstances.

In particular, if you have in your account temporarily money from a house sale it is protected up to a million for up to six months.

www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

NS&I has full protection because it’s gmt backed. I know it’s not maximising income but it’s safe and will meet your needs.

You make an appointment with a personal advisor. It's not something you can go through with the teller. We sold a house and had to do this.

Put it in NS&I Bonds. You need to try to mitigate inflation. You'll know roughly how much you need per year. So 1-2 years on instant or 90 day access. Then the rest into bonds which mature annually, which then go to replenish the short access savings.

I feel his pain re PoA, it took me four months to get one bank sorted out and I'm still to-ing and fro-ing with another who put my old name on documentation, despite all the ID I gave them being in my current name.

Another vote for NS&I and/or premium bonds. Very straightforward.

How much is it? Have you investigated buying a long term care annuity?

www.payingforcare.org/buy-a-care-annuity/

This way the funds won't run out.

I don't know the details but worth considering.

Why do they need an appointment at the bank?

My husband has been in a similar position. He put some of his mother's money in premium bonds. He has poa and found it straightforward.

You'll need to make appointment with the bank. Physically. We had to. Make sure he takes in his passport, utility bill and all the POA paperwork.

It's a ball ache.

I believe (but do check) that money put into NS&I accounts is protected even above the £85000 limit

There is a small risk, of course, but it is not one which would bother me in your shoes.

Honestly, provided that MIL is with a mainstream bank, I would leave it all in there. The £85k kicks in if a bank fails and it’s really unlikely that any major bank will fail before she dies/uses up the capital.