Investments for fathers nursing home costs

Beacon_123

I have worked with NHFA for many years and can assure you that we dealt with several thousands of cases not all of which resulted in 'business' being written. We believe that giving advice on 'care fees' does not just mean selling something, but giving people the right information to see them through a very difficult and distressing time.

As we are now closing for new business I would urge anyone requiring advice to make sure that they seek independent advice from a real expert in the care sector. It is a complex subject and misleading advice can prove very costly.

SOLLA (Society of Later Life Advisers) is a good place to start looking.

dunstonh

I have worked with NHFA for many years and can assure you that we dealt with several thousands of cases not all of which resulted in 'business' being written. We believe that giving advice on 'care fees' does not just mean selling something, but giving people the right information to see them through a very difficult and distressing time.

I was only going off their own announcement which said they only did a few hundred cases a year.

You would expect it to be a minority option and banks don't like funding departments to cater for a minority.

jamesd

He should be a tax payer on around £13,000 a year unless an immediate needs annuity is used or ISAs are used to hold income-producing investments. Corporate bond funds and distribution funds are available that pay out 6-9% so around 170 a week is doable from the capital available. Since capital will also need to be drained the money would run out in about six years.

It'll be convenient to move the ISA money into one place and the ISA will protect the interest from income-producing funds from being taxable, possibly keeping him below the tax threshold. Moving the money out of the ISA wrapper would be a mistake.

For drawing on capital or for spending some on an immediate needs annuity the first priority money to use is the money that isn't in the ISAs. You'd also want to use his annual ISA allowance each year to move money into the ISA as fast as possible to keep as much as possible of the income non-taxable.

You wouldn't be acting responsibly as his power of attorney holder to retain the premium bonds. They are the lowest paying money he has and the first you should be looking to use up.

It would be a good idea to request advice from your IFA to provide professional backing for your decisions.

One possibly interesting option is to use an immediate needs annuity for part of the costs and investment income and capital drawdown for the rest. That's something of a hedge of the bets on life expectancy. The better his health, the more money could appropriately be spent on the immediate needs annuity. As a number to start at you might consider spending up to the total of all the money not in the ISAs on such an annuity, since the non-ISA money is the least efficient income generator.

Given the thoughts on his health you might decide that it's sensible to cap the immediate needs annuity payout at perhaps a third to half of the shortfall, with the probabilities suggesting that an uncommonly long life is not likely. This money is payable without tax directly to the care provider so it gets more favourable tax treatment than money outside an ISA. This could then leave his remaining income below the taxable level so any remaining income wouldn't be taxed even if not in an ISA.

Make sure that you know who the beneficiaries of his will are, in case they aren't just his wife. If she's asking to have his money spent on her needs instead of only his, his other beneficiaries may be most unhappy to have you using money in that way.