Passing money on to the children

margaretclare

That said, although I have not looked at the problem personally , I believe that there is some financial help available, regardless of assets, in the shape of tax allowances and carers grants/allowances if children look after parents who would otherwise need residential care.

Hi

There is Attendance Allowance, which can be claimed if you need a lot of help with bathing, dressing, basic activities of life. If you need a lot of help in the night there's a higher level paid. Anyone looking after a person in receipt of AA, provided they spend at least 35 hrs a week caring, can claim a Carers' Allowance, and this can be the spouse. It's not fantastic, and it's not that easy to get, but it could help if appropriate.

If you have property with equity in it, one of the equity-release schemes could be appropriate. You can get more the older you are. At 67 we were able to tap into 25% of the equity here, releasing enough to pay off the original mortgage and thereby freeing up £265 a month which doesn't have to go to the mortgage lender.

However, at 62 the lady at the start of this thread is too young for that. And the original question was how can she pass on money to her children, therefore she perhaps wouldn't want to release equity for her own use, she'd want to keep it to pass on. I totally disagree with this point of view, but I have to admit, it's one I've heard more and more often.

At 62 the lady could still do some work. Both I and my husband worked up to age 67! And although I don't work any more, I'm still paying into a stakeholder because I reckon by age 75 I might need a little bit extra.

Our situation could (would!) radically change when one of us is left on his/her own. The reason we are 'comfortable' now is because we both get pensions and annuities individually in our own right. So we are still saving, just because we don't know what's around the corner! And we have concentrated on making our home easy-care and convenient to live in. Household chores you mentioned...we don't do many!! I've replaced household appliances with the most modern and energy-efficient possible. I pay for help with the garden when it looks like getting a bit out of hand - mostly, it's left to the wildlife which we love seeing. And once you stop seeing plants as 'weeds' and realise that they're really native wildflowers, it gets easier.

I really do think that for many people there are a period of years when you can take steps to make life easier for the future. If you live in a 4-bedroom house with stairs, move to something smaller and more manageable! Not necessarily sheltered accommodation, just something smaller and more easy-care.

I realise a lot of people will disagree. !

It's also worth adding that the law has been changed - anyone who needs nursing (i.e. qualified attention) as opposed to basic care, doesn't have to pay. They only pay for the residential component of a nursing home stay and not for nursing as such. However, it's often difficult to differentiate 'nursing' from 'basic care'.

Margaret

lisyloo

My mother in law gets arrendance allowance at the higher rate (and I'm pretty sure this isn't means tested as they have some assets).

They looked at equity release two years ago when they were both 74.
They found the return pretty poor.
I think it was £250 per month for giving away 75% of a house worth £105K.

Instead they moved to a small sheltered flat.
This has helped them financially because they freed up some cash that they can spend as they wish.
They also have a lot less cleaning and maintenance and lower household bills.
They also have a lot of company and organised activities like bingo and coach trips.

This has worked well for them, the only downside is the service charge for the flats which is £2K per year (full time manager, red care on call etc).

My mother-in-law is not relaxed about money because the lump sum they have will have to be used for the service charge over time and therefore they can't just use it to spend on what they want.

I think it's just generally difficult if you don't have much money and also don't know how long it's going to last.
I guess this might be one advantage of the on going monthly income as opposed to a lump sum, however we didn't think what was offered was good value.
I don't think they fully valued the fact that the money would never run out.

margaretclare

My mother in law gets arrendance allowance at the higher rate (and I'm pretty sure this isn't means tested as they have some assets

No, attendance allowance isn't means-tested.

What about Carer's Allowance - if someone is on AA then someone else (spouse?) should be getting CA.

Sounds like your in-laws made a wise choice when they moved, and there are advantages for them. You mention a lump sum - is this stashed in a high-interest account to draw on as they need it? Something like ING Direct could be a good idea.

Margaret

lisyloo

What about Carer's Allowance - if someone is on AA then someone else (spouse?) should be getting CA.

I think there was a mention of 35 hours.
She is badly arthritic and requires help from time to time e.g. getting out of bed, but this would be a few minutes a day so I don't think they'd qualify for the 35 hours.
I will check with them though.

We applied for pension credit but because of their lump sum they don't qualify.
I agree with the priniciple of not helping people with assets but I think this is assesed unfairly i.e. over a certain threshold (£6k?) every £500 counts as £50 income a year and we all know you can't get anywhere near 10% income from your savings.
Never mind they will be able to claim when they have less money.

You mention a lump sum - is this stashed in a high-interest account to draw on as they need it? Something like ING Direct could be a good idea.

We did have it in ING direct but moved a few months ago to the Cahoot account which is now paying 5.65%.
We have left the ING one open so that we can move back if necessary (Cahoot rate will only be high for 12 months).
The only downside is that Cahoot only pay interest annually and I think they liked seeing it (and drawing it) every month, but yes, the money is there for them to draw down whenever they need some (for holidays, large bills etc.).

Unfortunately this doesn't quite give them the peace of mind expected because they can't spend it very freely for fear of it running out.
The £2K annual service charge is the main worry.

I did try to explain the value of the annuity when we were looking at the equity release i.e. it NEVER runs out (while they need it), but I think it's very hard for people to appreciate the full value fo that.

lisyloo

I have checked the age concern website and they say

There is no upper age limit for claiming Carer’s Allowance, but if you receive a state pension of at least £44.35 a week, you won’t get paid any allowance. But even if you cannot be paid Carer’s Allowance, it may still be worth claiming because you could get extra money through Pension Credit, Housing Benefit or Council Tax Benefit.

My father in laws pensions exceeds this and they don't qualify for the other benefits mentioned so I'm pretty sure they won't get it.

Thanks for the advice though. Always worth checking.

sleepless_saver

1. Apologies if I'm saying the obvious here, but going back to the original post, if KH127 's mother has an income of only £3000 a year, has limited savings and is over 60, she should definitely apply for pension credit which could boost her income considerably. This is means tested but once you have it, you don't have to keep re-applying to keep it. See

http://www.thepensionservice.gov.uk/pensioncredit/

2. You don't have to be receiving care to be entitled to attendance allowance so there is no direct relationship with carers allowance. (Also, if you receive paid care then the person doing that obviously doesn't get CA)

3. My mother and I realised that all the money saving tips from this site work for her too! So she now has 18866 calls helping her keep in touch with friends at minimal cost, has cut her car insurance (had been with same insurer for years), cut fuel costs (1 person 1 bedroom via Staywarm), and buys her Xmas prezzies etc. online. I help with some of this as computer is not that easy for her to use. But I reckon she's saved at least £500 a year!