what should FIL do with money from house sale?

[Americanlaw]

Hi, FIL spends all his pension on MIL care home.
He has sold his house and will live with us, but what should he do with 700k? From house sale.
he will need to ring fence some as I’m sure he will need a care home in a year or so too.
is it worth getting an IFA, how do we find a good one? DH is going to chat to an IFA with him, but how can we check what he suggests?
Should he just use an asset management company and again, how do we find a good one?
thank you!

It may be that the money from the house sale belongs to MIL as well and so could be counted now or in the future as needing to go towards her care.

Yes, it belongs to both of them.
We need to find out how to protect it for them both - I suspect it will all go in care home fees, as they are about 80k plus a year. But we need it not to be sitting in a current account!

You can put it in NS&I where it will be completely safe and still attract some interest.
Max out on PB's for them both if you like but just put the remainder into savings.
No £85k limit with NS&I and easy access.

Gives you thinking time to see if you want to invest some of it.

I recently sold my DM’s house and purchased some fixed rate bonds for her, an ISA for last tax year, one for this one and have the rest in another account that pays 3% but is easy to manage until I get a plan with what to do with it.

Talk to a specialist aged care solicitor, with a slightly higher sum we purchased a care annuity for my Mum which when added to her pension covers all her care costs.

Cost £135k but each person will receive an individual quote.

Obviously expensive if Mum had died within a short period but we are currently in profit.

Interest and winnings on the remaining capital sum invested stand at £120k currently.

I agree NS & I and max out their ISA each year - the £700k will earn interest which is taxable the more you can get into ISAs means interest is tax free.

You can buy a care annuity for mother in law (and father in law), it is worth checking the likely cost.

You don't want to do anything risky with the sale proceeds, they need to last as long as possible. Put his share in a separate accounts in his sole name and her share in separate accounts in her sole name.

Spread the savings accounts to use different banks so they don't exceed the £85k threshold. The money goes fast!

First thing is don't keep more than £85k in one bank!

I would put half in accounts in mum's name and half in dad's name. You can then use her half to pay for her care home fees and he can spend/save his pension and savings.

I would very strongly consider seeing an IFA. It is less about advising about what to do with the £700k (ie investments etc) and more advising about whether there are specific things that should be considered re future expenditures for both parties (ie MIL and FIL).

Talk to a qualified IFA rather than randoms on the internet.

I hope you can get some useful advice. In the first instance you have at least 6 months before you need to worry about keeping no more than £85k in a single bank as there is added protection for a while after a house sale (possibly as long as 18 months but I'm not sure). So putting it somewhere interest bearing and seeking advice before making longer term decisions is the right thing to do.

I second this.

My IFA recommended NS&I as I'm risk averse, they're backed by HM Treasury, who apparently guarantee 100% of everything you invest in NS&I and the £85K max limit in my NatWest current account problem went away.

When I needed to take a chunk of money out it wasn't instant but was perfectly doable. Good luck.

My concerns with IFA's is that I'm not sure they always advise the best things, as they can sell products. I saw one about my Pension, and they definitely didn't give me advice that was in my best interests. I would also say NS&I. You can invest up to £2m and it's protected.

They only pay 3.3% now, and interest rates are likely to fall soon. What about a fixed rate bond that pays higher and won't be subject to interest rate cuts? MoneySavingExpert or banks/building societies should have details.

I should say several bonds with that high amount to put away - so you could have say one year, two year, five year bonds, etc with fixed interest rates. If you need money before the term ends, you can use the one with least time to go and least interest.

Id put it in a high interest savings account. £700k will earn £31,500 a year at 4.5%. Don’t save more than 85k with one bank though as that’s the max covered in the deposit protection scheme.

I recently had a lump sum between houses so I set up a Hargreaves Lansdowne account. Its a savings and investment platform that allows you to have savings with multiple banks but without having a separate account with each bank. It’s easy to search for the banks with the best rates and move the money around. Their customer service is really good too. Their rates are far better than NSI which I looked at as well.

NS&I have just refreshed their range of Growth Bonds and Income Bonds, which may be worth a look.

For an IFA who specialises in advice about investing for care fees, look for one local to you who is a member of the Society of Later Life Advisers (SOLLA) - there is a search function on the SOLLA website.

sorry not to respond earlier - we have been moving FIL. I’ve been sharing this with DH who is a big fan of mumsnet, and is very grateful for the pointers. This is brilliant advice thank you so much.