Do you have a financial anxiety, dilemma or quandary? Ask Jessie Hewitson, veteran money journalist and editor, and new financial agony aunt for The i Paper. Jessie is answering readers’ questions while consulting with the top experts in the field (many of whom charge high fees) to get readers the very best advice. She will combine this with her own life experiences, which includes not always making the most sensible financial decisions in her personal life. Email questions to money@inews.co.uk, with Ask Jessie in the subject line and she will get to work.
Roger, a reader, asks:
I am 79, a homeowner with no mortgage, loans or debts. I am married with two grown-up, independent children and following downsizing I am sitting on about £240,000 in a bank account that earns virtually nothing at all.
I was given a diagnosis of terminal cancer (four different types) some 15 months ago, which according to both my surgeon, and oncologist, gave me a then life expectancy of only three months.
However, and I do not know why, I am somehow still alive, despite the expectations of the specialists. But I have no idea how long I actually have left.
Over the years, I have taken investment advice from finance professionals, and each time, I have lost money on my investments as a result.
I have a decent private pension, of which 50 per cent will continue to be paid to my wife after my death.
I now need to find a financially attractive, relatively stable home for whatever time I have left, to place most of these spare funds, to secure my family’s future, and be accessible following my eventual demise.
I have been considering NS&I Premium Bonds, but would appreciate your thoughts on whether this would be the best course of action, bearing in mind my circumstances, or whether there are more sensible alternatives, taking into account potential tax and probate implications.
Is this something that you could help me with please?
Jessie responds:
I am very sorry to hear of your diagnosis. It’s wonderful news you are here and able to spend more time with your family.
In terms of where to put your money, the best thing to do is to open a joint cash savings account in your and your wife’s name. Granted it’s not the most exciting option, but it doesn’t make sense to invest in such uncertain circumstances and your wife will have easy access to the money when she needs it.
The good news is rates for cash savings are decent. The market-leading deals that offer joint accounts are Virgin Money, which is paying 4.51 per cent and Leeds and Skipton Building Societies, both offering 4.4 per cent.
I’ve suggested three as given the amount you have, you will need to spread it over this number of accounts to protect your money (each account is protected to the tune of £85,000 if the bank goes under by the Financial Services Compensation Scheme).
I wouldn’t suggest Premium Bonds unless your wife buys them in her name. If they are in your name, then when your wife needs more than £5,000, she will have to provide a probate certificate. It’s going to be a bit of hassle, and possibly turn into a large hassle as NS&I has an inconsistent track record in handling these requests efficiently.
On the upside, you could put all your money there (as NS&I is a government-backed bank it will guarantee all funds even if they are above £85,000), but the downside is the rate is likely to be lower, with an estimated prize fund of 4 per cent.
Cash saving also makes sense, particularly given your poor experience of investing, because it’s so low maintenance. You don’t have to worry about losing any money. While I’m all for maximising the money you make, it is also important to recognise there are times in life when the return isn’t the biggest priority. And this is one of those times, when having the least amount of hassle in your life is the more valuable outcome.
If it isn’t too upsetting (or annoying), there is a Swedish-led trend for what is known as “death cleaning”, which involves gathering all your financial admin in one place. This means compiling a list of all your passwords, logins and details of accounts (adding your wife’s name on accounts if she isn’t there) and telling your family where to find this information.
The Scandi process also involves decluttering: the idea is that you do this so your family don’t have to. But also please don’t feel you have to do any of this. I would imagine that one upside of having an uncertain amount of time left is that you can ditch any unwelcome expectations on what you “should” do. So if this isn’t for you, tell the Swedes – with their lifestyle crazes for every life stage – to sod off.
Obviously it’s a cliche to say that your time should be spent not on what makes you happy and spending time with the people you love. But I know first-hand how important it is: my dad died of cancer four years ago, and the best and closest times I had with him were in the months before his death. I think of those dinners and walks we had a lot.
If you have any more questions, please do write to me. It would be great to hear from you again.
