investment for nursing home fees

gibbo888

Hi

My Grandmother has had to go into full time residential care and the costs are aprox £1200 pcm
She is in the process of selling her house to pay for this!! (dont get me started on the government!!)

What would be the best option for investing aprox £220k for monthly income to get as much back to help pay the costs, (her pension covers about half of it)
The money will still be in her name but i would be drawing the money to pay for the care and i cant have any risk really, as i cant have the capital being erroded as she could be there for quite a long time?

Cheers for any guidance

Mike

dunstonh

The money will still be in her name but i would be drawing the money to pay for the care and i cant have any risk really, as i cant have the capital being erroded as she could be there for quite a long time?

If you take no risk, the money will be eroded as returns will not be sufficient. If you take some risks the returns will be more volatile but over time, you shouldnt see as much erosion.

Risk is not an level of two - on or off. Its a sliding scale and a product with risk can actually have very limited risk. For example, on the amount you are looking at, there are providers where you can get £11,000 given to you just by investing with them. They also have funds across the risk spectrum to suit most goals. That 11k given to you (your grandmother) would offset some of the risk in if you limited yourself to a low risk portfolio.

Also, with 220k, you would have tax issues to consider. Some investments would handle this better than others. How much the tax would be would depend on her personal tax situation. If you looked at 5% interest and assumed a basic state pension, she is getting very close to getting her age allowance reduced. If there are other pension incomes or savings income then the they could potentially wipe out her age allowance.

gibbo888

Thanks

5% would about cover the costs, i will do some more digging around see if i can find the providers

cheerfulcat

Hi, gibbo,

There are products available which address this particular problem; have a look here -

http://sharingpensions.co.uk/annuity_immediate_needs.htm

Help the Aged also has some advice pages

http://www.helptheaged.org.uk/Health/Care/_default.htm

gibbo888

Thanks cheerfulcat

There is some useful info there to troll through.

Mike