How do I invest to pay mum's fees

Carer_Linda

My mothers house is being sold to pay her care home fees. Any advise on how to invest the money allowing a £3000 per month fee payment. The lump sum should last 5 years and will need to be split if put in the bank because of the 75k guarantee. Annuities want too much money

Linton

From what you say I assume the lump sum is about £200000. For that amount of money I think you should seek professional advice. When you say annuities want too much money do you mean care/immediate needs annuities? What was their offer? Such annuities are normally offered through a financial advisor. Do you have one?

If you want to put it in a cash account I suggest you look at NS&I. Their accounts are guaranteed by the government for any amount of money and offer a better rate of interest for large sums of money than most banks.

Dird

£3000/month!

xylophone

http://societyoflaterlifeadvisers.co.uk/

https://www.ftadviser.com/2015/06/11/pensions/annuities/getting-to-grips-with-immediate-needs-annuities-Kk30eC7jC9jCQTuR1qSJKI/article.html

Above may be worth a look.

Don't forget that you should factor in your mother's pension (s) in your calculations.

Does she receive Attendance Allowance?

You/your mother should ensure that she has the best current account (s) for her needs.

A Santander 123 would give a net 1.2 after fees and could be a place to hold £20,000 and you could pay the monthly fees from this, topping up as required - a couple of Tesco Current Accounts would hold £6000 at 3% and could be topped up as required from an Income Bonds account with NS&I which could hold say another £50,000 - this would pay monthly income of 1%.

If she needs DDs, these can be generated from Tesco savings accounts.

The balance of the money might be conservatively invested through a stocks and shares ISA/ stocks and shares account and could provide growth and income - an IFA would advise.

Among the funds held by a relation of mine who holds PoA for his care home resident elderly relation are Invesco Perpetual Distribution and Premier Monthly Income.

teddysmum

Dird wrote: »

£3000/month!

An article in yesterday's Mail suggested that the average is £750/week with higher cost in London and that care homes are closing because they cannot survive (make huge profits) on that level, where councils pay less than private individuals.

xylophone

£3000/month!

Relative who has PoA for his relative tells me that the care home fees are close on £60,000 a year.

talexuser

Dird wrote: »

£3000/month!

My mum's care home is right in that region, and is what you need for a decent place with activities and trips out.

Xylophone has given good advice, All my mum's pensions and AA go into high interest bank accounts with myself as power of attourney (can sometimes be a hassle to arrange but worth it in the long run). Then enough for more than a years worth of fees into a building soc account, again POA. At the moment National Savings 1% is about the best you can get. All her ISAs have been transferred into monthly income funds which cover the rest of the shortfall. Bear in mind that a stock market fall could reduce dividends, so assume a worst case and calculate enough ready cash is available for enough time for a typical recovery.

Chickereeeee

Have you considered renting the place out, and using rental income to help with care home fees?

HarryFlatters

Just looked at the latest bill for my old dad, living inside the M25 (just) £4200 less FNC contribution £690 = £3510 nett
Nursing homes are expensive, as others have said the privately funding residents (£950 per week in this case) do subsidise the council funded residents they are obliged to accept (£500pw). The owner does run a Lambourghini so my sympathies only run so far
We are fortunate the bill is almost covered by his pensions, I have POA and can recommend NS&I for a proportion, you do need to check the small print of the POA as I understood you could not deviate from what is deemed to be your parents usual pattern of investing, I had discussions with the Official Solicitor to confirm this.

xylophone

Just looked at the latest bill for my old dad, living inside the M25 (just) £4200 less FNC contribution £690 = £3510 nett

Then he can count himself lucky...as a matter of interest, I've been talking to the relative with the EPoA and he say that the last increase took the fees to over £5200 a month - the care home is in a London suburb apparently.

He says that investing was no problem as his relative was a keen investor with shares etc in and out of ISAs - apparently it was for him (as with the OP) a case of investing the proceeds of sale of the family home after the relative's physical frailty made living alone a virtual impossibility.

margaretclare

Dird: This may have been written tongue-in-cheek as an attempt at humour, but I think this is an appalling post. Insulting on all sorts of levels, not least sexist and racist against Filipinas.

Your relatives may well die off before you, or you may die first. The most recent funerals we've been to have been people who were half our age, one almost a year ago, another one next week.

DH and I are still saving and one of the things we expect to pay for is anything we need for ourselves. Home adaptations e.g. mobility bathroom this year, gardening, cleaning.

The OP asked a serious question and deserves a serious answer. There are things called 'immediate needs annuity' but I don't know anything about them.