Investing proceeds of house sale for care home fees

talexuser

I have POA for my Mum in a care home. The attendance allowance suggestion above is very pertinent for dementia, the manager of the home should be able to advise you on filling the forms, and it will be worth approx £4280 a year.

The following is not advice, just my experience:

My mum has an ISA which I have now in monthly income funds. With 200k available you could put £15240 in before April 5th and £20000 in after April 6th. Last year my funds provided an income of 4.3%... on £35240 that would be around £1500 a year with a very slightly increasing capital. In the future event of a market correction or crash you have not risked a great proportion of your capital, leaving money for less risky uses.

Options not requiring an ISA depend on tax status and whether your Mum is exceeding her allowance.

I opened multiple TSB, BoS current accounts, transferred her Lloyds to Club under POA, which was rather a hassle to be truthful, but used to give me 5%, but now less at 2 to 3% but still better than instant access accounts around 1%. 2 x TSB and 3 x BoS +Lloyds could account for around £23000 if you can still open them.

Apart from the best rate you can get for cash the other options are the annuities mentioned above.

With 200k you're not in panic territory, get the best rate you can meanwhile and explore all the possibilities in depth.

talexuser

p.s last years increase in the care home fees for me was 7%, we'll see what this April brings, but bear that in mind too.

pestopasta_2

I thought I'd update this thread as people in future in the same situation may be interested in the outcome.

Had the advice today from my IFA. It took a long time (5 months!!) which he freely acknowledged but I have to say I found his advice useful and it's massively put my mind at rest.

I won't go into great detail because everyone's situation is different and his advice to me wouldn't be appropriate to everyone.

But it came down to two main options.

(a) Set aside the money for a number of years care (maybe 5) now and get the best rate of interest possible. Invest the rest - interestingly in a passive multi-asset fund. I had previously given a steer that I was more minded (rightly or wrongly) towards passive rather than active and the proposed solutions matched that (which he openly acknowledged). We discussed two options - involving basically a 35/55 and a 55/45 equity/bond split. From this forum I know that I could buy something similar or the same - he quoted 2 per cent initial and 1.5 ongoing fees (although he quickly said this could be reduced to 1.0 ongoing). If I go down that route I think I could manage that myself

(b) An Immediate Care Annuity - which several posters had already mentioned. I'd not previously appreciated that the cost to cover our shortfall plus a 5 per cent increase per year could be covered by significantly less than the amount of capital we have. Or that we had the option of investing now with a view to buying such an annuity in years to come at a fraction of the cost. This peace of mind was worth the cost of the advice (£800) in my view. Arguably I could have researched this myself but I would have been much less confident in the conclusions I reached.

My Mum is in a residential home and one of the big factors is the unknown of whether and when she might need more intensive care. This was factored into the different scenarios that were in the report and at least I can now make an informed choice.

I felt that my IFA had empathised with me - he'd seen many clients in the same position and there wasn't any hard sell. I paid the cheque for the advice and said I'd think about it. He said it was always possible for me to act on his advice from a DIY position but then review it with him in future - and I'd seriously consider that option.

I've had bad experiences in the past with IFAs but (just when I really needed help) this seemed to me to be different and I'd certainly recommend that people in the same position as me do not rule out getting advice out of hand.

I hope this is helpful to future posters.