Halifax guaranteed investment plan

Curly_Sue_3

My parents (who are both in their 80's) have a lump sum of a sizeable amount to invest and have been advised by the Halifax that their best option would be to put this in the Guaranteed Investment Plan. They do not wish to access this money and really want to protect this money for the future.

The advisor suggested that investing in this plan would mean that if either or both of them needed to go into a nursing home at a later date, this would not be taken into account with the rest of their assets. I cannot find any documentation to back this up, although if this is correct, this makes it an attractive option for them.

I don't know much about investments at all and they have asked my advice. I can see that they are guaranteed to receive 100% of their money back if they leave it in there for 5 years or 80% if drawn earlier and there is potential growth of up to 8% per year, but my father has a cautious approach to investment and I am not sure if this is right for them.

Any advice you can offer me would be gratefully received.

dunstonh

The advisor suggested that investing in this plan would mean that if either or both of them needed to go into a nursing home at a later date, this would not be taken into account with the rest of their assets. I cannot find any documentation to back this up, although if this is correct, this makes it an attractive option for them.

If the tax wrapper is an investment bond and the recommendation is suitable for an investment bond (in most cases unit trusts are more justifiable) and there is no indication that long term care is needed in the foreseeable future, then the investment bond would be disregarded in any means test for capital. If there is an income being drawn from it though, that would be included.

Advisers are not allowed to make the recommendation on the basis of avoided local authority care means testing. It would be classed as deprivation of assets if it was.

I can see that they are guaranteed to receive 100% of their money back if they leave it in there for 5 years or 80% if drawn earlier and there is potential growth of up to 8% per year, but my father has a cautious approach to investment and I am not sure if this is right for them.

Halifax have some of the worst investments on the market place. That said, are a couple in their 80s really going to be that interested in long term investments? Especially ones with a maturity date (which would potentially bring the capital back into a means test on maturity unlike an open ended investment).

Any advice you can offer me would be gratefully received.

Only a small minority of people require local authority care. Also, it is your parents money. If care is needed, would they really want to subject themselves to local authority care rather than use their money to fund their remaining days with a better quality of life?

If they really want to invest it then get them to see an IFA. Not a bank sales rep with a limited product range that is not very good and operates under a remit that prevents proper portfolio planning.

Curly_Sue_3

Thank you very much for your advice. I have suggested seeing an IFA because I'm very uncomfortable making recommendations on money that isn't mine! However, my father is very much "better the devil you know" and has great faith in Halifax. I will talk to them again.