Where to put £200k

[Cloudhopping]

My 85 yr old dm is downsizing and will have 200k after she has moved. There is a large management charge for the flat she is going to (about 6k a year) and she wishes to use the interest from the 200k to pay for this.

She has always been very sensible with money and has some other investments. She does not want any longish term investments so no stocks and shares ISA's/bonds etc but we're not sure of the best way for her to maximise the 200k in the shortish term.

We are thinking 50k into premium bonds, 20k in a cash ISA but we'd be really grateful for people' opinions on what she could do with the rest and whether the above plan is a good idea. She is a higher rate tax payer.

Many thanks

Stocks and shares ISAs are tax wrappers that can contain long or short term investments. So while a cash ISA is an option, another option is to have a stocks and shares ISA and then buy gilts in it that are maturing within the next few years.

Premium bonds may be suitable due to their tax-free nature and government guarantee of principle, but they are limited to 50k.

For the rest, again short-term gilts may be worth considering, or perhaps a short term bond fund, so long as it only holds bonds that mature within a few years.

All of these options are subject to suitability for her overall circumstances - I don’t know those, and this is not advice, just a list of options for further research and/or qualified advice.

I am sure you are aware, but make sure you keep less than £85k in any one account, for the safeguard guarantee. Yes £50k in p bonds, £20k in isa, another £20k in an isa after April 5th. That leaves £110 k that you will be taxed on the interest. If you want to avoid stocks and bonds, as I would at 85, search for the 2 best cash savings accounts, and shift £20k to isas each April.

I would put this in a fixed high interest savings accounts as the need for a guaranteed fixed amount is the most important factor. Looking at the money savings expert savings section. There are several products paying 4% interest and above for 2 of more years. I would go with one of the big/known names like Skipton BS. 4% of 200k per annum is 8k. Depending of her tax band she may need to pay tax on this interest. Stock/Shares could go up or down and she may lose some capital in the fluctuation.

Worth noting that NS&I protect any amount of money, the only provider based in the UK that does.

Thanks all, that's been really helpful.