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

[redskydarknight]

I wasn't sure whether to post this here or in Money Matters, but I figured there were probably people on here that have gone through this same dilemma.

Sadly MIL is now unable to live independently and is in a nursing home. Her house is being sold to pay for care (she has no other notable assets). The question is - where do we put the lump sum that this will generate? DH was just going to put it in her savings account but I pointed out that only £85000 would be protected. MIL doesn't have any other accounts. DH has PoA and can obviously open more in her name and spread the money about, but he has had previous bad experiences regarding the challenge of trying to do things with a PoA and would rather avoid if possible.

Is this just what everyone does, or is there another solution we are missing?

@redskydarknight honestly I would message Martin Lewis Money Saving Expert.

I think you can invest it to grow it (hard work) but you can't hide it or make big gifts at this point.

Why sort of problems has he had, OP?

While I don't have the answer, it really does depend on how long you expect her to live.

Just when doing other things (e.g. he applied for access to her online banking) nobody seems to understand the process to follow if you have a PoA rather than being the actual person.

He's spent hours on hold on the phone being passed from person to person; there's been insistences that he must come in to a physical branch/office which is often not very convenient, but even then he's been left waiting and passed from person to person. He's been given information that turns out to be wrong (e.g. with paperwork required and whether it has to be certified copies or originals) which takes more time. Basically what he hopes would be a straightforward process has never proven to be so.

Absolutely not trying to do that. Just trying to manage it sensibly.

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.

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

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

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.

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.

Why do they need an appointment at the bank?

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.

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

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.

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.

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.

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/

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.

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.

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

Wow - thank you so much everybody. Some great ideas on here and lots of things I/we didn't know about. Plenty to take into consideration anyway.

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.

@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.

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.