Should an older person have S&S or cash ISA?

[BearlyThere34]

Parent has some savings for potential care costs which are currently in S&S ISAs. They are early 80s. Should they be moving these into cash savings? They have pension income so don't currently need to spend the savings. They have asked me for advice but I don't know much about investing. I am aware you are supposed to leave investments for the long term so am wondering if you ought to 'de-invest' slowly over time or wait until you need the funds. Any advice?

Do they have cash savings too? It's wise to have a balance of cash savings vs S&S. Usually also wise to gradually increase the proportion of cash savings so that you're not so exposed to drops in the stock market when you need the money.

Is it a lot of money (eg more than £100k)? Based on my parent's situation, most of their savings are cash (mostly fixed rate ISAs and PBs) although they have a long-standing S&S bond which I've never bothered to suggest cashing in as it's less than a quarter of their savings so happy to take a chance with it. And the value of the house vastly outstrips the S&S bond, so that would be used for care home fees, if needed.

If your parent does start to build up cash savings, I'd suggest fixed rate ISAs. They pay a higher rate of interest because you hold them for a fixed term (eg 1, 2 or 3 years). As well as being tax-free, they benefit over fixed rate cash bonds in that the money can be accessed before the end of the fixed term (subject to an early redemption penalty of loss of interest). Whereas fixed rate cash bonds can't be accessed early (only upon death) so the money wouldn't be available before the end of the fixed term.

The following consistently offer decent rates for ISAs:

• Coventry Building Society
• Leeds Building Society
• Kent Reliance

Are you able to track the recent value of the S&S ISAs? The value of investments has dropped in the past few months, so it may not be the best time to cash in (not that you can ever tell beforehand anyway!).

This is quite tricky. The money may never be needed for care home costs.
Inflation is the biggest threat to savings at the moment, it's quite possible once it falls due to energy costs coming out of the data, it could settle around 4% and stick for a while.
That kind of a scenario could be good for stocks but all depends what the money is invested in.
Not enough detail to really advise

Thanks for the very helpful advice.