Investments for fathers nursing home costs

Biggles

Iancfp wrote: »

No Symponia is a trade group for IFAs who specialise in care fees planning and who have the examinations etc to do the job properly

St James Place are rip off merchants with little qualification and less morals

I was just looking at the list of advisers generated by the Symponia 'find your local agent' facility.

It produced five in my region, four of whom had St James's Place Wealth Management websites or email addresses.

Iancfp

Ah 15 advisers no St James Place in ours

just pass them by and check you pockets after

Silvester

iwilson16 wrote: »

He re-married 25 years ago, and his wife has her own pension from
her first husband. She will pick-up the costs of his care if his
capital runs out.

I was under the impression social services pick up the bill when his money has run out.

iwilson16

Thanks for all the ideas (and support) so far!

I broached a few of these ideas with my dads wife. She seemed pretty dubious about the idea of an Immediate Needs Annuity. Obviously I need to obtain an accurate quote that takes account of his age and health, but a few sites mentioned a premium of 4-5 times the care costs.

I also mentioned selling the premium bonds. She seemed dead against that. What are the arguements for selling them, especially given the low rates of returns on savings accounts just now.

All the household bills are currently coming out of my dads money (approx £340 pm). This doesnt seem right to me, especially when dads wife has her own pension, and he is now in a home. Though not sure how I can raise this delicate subject ....

Thanks
Ian

Stochasticity

iwilson16 wrote: »

I also mentioned selling the premium bonds. She seemed dead against that. What are the arguments for selling them, especially given the low rates of returns on savings accounts just now.

- Do not produce a reliable income stream, 'winnings' come through in dribs and drabs if at all. Interest on savings can pay a reliable amount monthly to help with care costs.

- As measured by the mean, average 'winnings' are equivalent to 1.5% interest (tax-free). This average rate is obviously uncompetitive relative to 3% gross (2.4% net of basic rate tax) easily available in instant access savings accounts.

- Chances of winning the million in any given month are 1 in 42 billion per £1 invested. You're 3,000 times less likely to win the premium bonds million than you are to win the lottery! Feeling lucky? If you really must gamble, you're better off buying the odd lottery ticket out of the interest accumulated from saving the capital in a savings account instead of in premium bonds.

- Typically harder to access the capital in premium bonds than it is to make a withdrawal from a savings account, though this isn't always the case.

dunstonh

I also mentioned selling the premium bonds. She seemed dead against that. What are the arguements for selling them, especially given the low rates of returns on savings accounts just now.

Stochasitcity has given a good breakdown. However, another way of wording it to her is to ask if she would put the money in a savings account and use the interest it pays each month to buy lottery tickets. If she says no (which most normal people would) then you tell her that is exactly what she is doing with Premium Bonds.

Stochasticity

iwilson16 wrote: »

Should I consider selling any of the investments, or moving them
into different (safer) funds?



ISA Bank of Scotland £3,853
(£2094 cash + 925 BT shares)
ISA Threadneedle £15,837
(2 funds - UK fund and Global Equity)
ISA M&G £25,080
(2 funds - M&G Basics, M&G High Yield Corp. Bond)
ISA F&C £4,429
(Stewardship Income Scheme)

Prudential £865.68
Standard Life £3,648.60

You're never going to be able to make £125k in capital provide £494 a week (or, presumably, nearer a £470 shortfall once his state pension is included and the bills you've mentioned are stripped out) - at best you're looking at it producing maybe £100. The capital will be eroded over time then via outgoings greater than income plus inflation, to nothing within about 7 years.

Nevertheless, these investments would on the face of it seem far too aggressive and growth-orientated for an 82 year old man with income needs and a short-term investment horizon. BT shares, Threadneedle UK fund, Threadneedle Global Equity, M&G Global Basics and F&C Stewardship Income are all equities and so could plausibly drop very sharply in the short term. As his capital is being naturally eroded anyway, market downturns swiftly bring forward its erosion to nothing as you have increasingly less money invested in any subsequent recovery.

If you don't decide to go with an immediate needs annuity, I'd suggest re-organising the above investments so that much more of it is invested in less risky assets geared more towards income rather than growth, like bond funds (potentially index-linked to partially protect against inflation).

iwilson16

I like the idea of one or more bond funds.

Since my fathers income is well below the tax threshold, I assume there is no need to keep the ISA money in ISA's. i.e. all the current investments could be sold, and the money put into bond funds instead.

I already have an IFA for my own finances. I am considering asking him to
take a look at all this.

Thanks,
Ian

Stochasticity wrote: »

You're never going to be able to make £125k in capital provide £494 a week (or, presumably, nearer a £470 shortfall once his state pension is included and the bills you've mentioned are stripped out) - at best you're looking at it producing maybe £100. The capital will be eroded over time then via outgoings greater than income plus inflation, to nothing within about 7 years.

Nevertheless, these investments would on the face of it seem far too aggressive and growth-orientated for an 82 year old man with income needs and a short-term investment horizon. BT shares, Threadneedle UK fund, Threadneedle Global Equity, M&G Global Basics and F&C Stewardship Income are all equities and so could plausibly drop very sharply in the short term. As his capital is being naturally eroded anyway, market downturns swiftly bring forward its erosion to nothing as you have increasingly less money invested in any subsequent recovery.

If you don't decide to go with an immediate needs annuity, I'd suggest re-organising the above investments so that much more of it is invested in less risky assets geared more towards income rather than growth, like bond funds (potentially index-linked to partially protect against inflation).

gadgetmind

iwilson16 wrote: »

I also mentioned selling the premium bonds. She seemed dead against that. What are the arguements for selling them, especially given the low rates of returns on savings accounts just now.

If it helps, you can send off an application for the new NS&I RPI+0.5% certificates, along with a form to sell your premium bonds, and your PBs that earn close to 0% interest will turn into ILSCs earning a handy bit more.

dunstonh

Find out about Immediate Care Plans from someone like NHFA (a subsidiary of HSBC).

NHFA is closing in July. However, there are enough local IFAs to cover it. Apparently, NHFA only did a few hundred cases a year. So, they were clearly not getting the volume.