Planning for Care

Bassetlaw_Badger

Help! My head is hurting!


I have been helping my father for the past ten years. He has vascular dementia and does marvellously well, still living on his own. I am hugely proud of him and how he copes.


I deal with his finances (POA and all that) however, I am struggling to plan for the future. We are self funding and he would like to be cared for in his home.


He has an ISA that has just matured and now has transferred to the heady heights of 0.05% interest, like the rest of the world. We are talking around £60k. Sadly so far the advisors we've spoken to don't seem very keen to give us any useful information.


He is a man of simple means and is is doing just fine living off his pension at the moment, and we have very little respite care, which we pay for ourselves (self funding as I said). However, as we progress on our dementia journey and require more care we will have no option but to use dad's savings at the least. Which is fine. But he is, to put it mildly, devastated at the prospect of having to go into residential care and also having to sell his home to do so. By my maths we will just be able to afford three or four years full time care in the home by using a combination of me, his pension and his savings. That's at todays rates of care costs and depends on the level of care required. And we can't afford to encounter any unforeseen expenses along the way.


So, now I've gone round the houses, my question is: what is the best thing to do with £50k of his money to make the best possible return to spend on his care going forward? I can't 'lock it in' anywhere as I don't know when I'm going to need it


Like I say, it makes my head hurt.

bostonerimus

The sad fact is that most people only stay in care for about 2 years and only 25% longer than four. In this sort of situation you can't really afford to take much risk as a stock market decline could seriously reduce your ability to pay for care.....of course in those circumstances there might be more public assistance available. Depending on your income needs, father's health and age you might look into an annuity

LHW99

Best to use bank / building society accounts, as you are PoA. Maybe using a ladder of fied rates for part of it, with ones that mature in one, two and three years.
If residential care starts to loom large, then get advice / costings on an immediate care needs annuity, which would give you (both) peace of mind that the majority of the fees will be paid as long as required. Depending on your father's age and medical condition at that time, it may take less than he has in savings.

Is he getting attendance allowance? Its not means tested and comes at two levels, also could you get Carer's Allowance?

jimjames

I don't use cash ISAs but I'm pretty sure you can get better than 0.05% on them.

Pickle_Lily

If you're prepared to take on the additional headache of being a landlord, renting out his house may be an option. We did this with my grandfather and worked well for us.


My grandmother was a dementia sufferer and in my experience, you don't want to scrimp on a care home in those (or any) circumstances so if the house does need to be rented out or sold to pay for it then it may be a necessary evil so to speak.

AnotherJoe

Pickle_Lily wrote: »

If you're prepared to take on the additional headache of being a landlord, renting out his house may be an option. We did this with my grandfather and worked well for us.


My grandmother was a dementia sufferer and in my experience, you don't want to scrimp on a care home in those (or any) circumstances so if the house does need to be rented out or sold to pay for it then it may be a necessary evil so to speak.

How did the maths work out PL? Were you just topping up income?

If you are getting say £1k/month from renting, you will likely need £1k/week for a care home so unless the money is just needed to top up from other sources, such as pensions, its likely not going to be enough.

Chickereeeee

AnotherJoe wrote: »

How did the maths work out PL? Were you just topping up income?

If you are getting say £1k/month from renting, you will likely need £1k/week for a care home so unless the money is just needed to top up from other sources, such as pensions, its likely not going to be enough.

We did similar with my MIL. She had state and a small private pension. Local council had a scheme whereby, if you wanted to rent out the property, any shortfall would be taken from the capital when the property was eventually sold. Seemed the best way for potentialy long term care.

As it was, MIL died less than a year after entering the care home, so although we were in the scheme, we did not use the facility in practise.

C

Pickle_Lily

How did the maths work out PL? Were you just topping up income?

If you are getting say £1k/month from renting, you will likely need £1k/week for a care home so unless the money is just needed to top up from other sources, such as pensions, its likely not going to be enough.

I wasn't involved with the details, but yes it would have been topping up an income rather than the sole funding for care. The OP has already mentioned that their father has a pension and some savings so it may be an option for them to at least consider.

xylophone

http://www.nhs.uk/Conditions/dementia-guide/Pages/dementia-and-social-services.aspx

https://www.moneyadviceservice.org.uk/en/articles/immediate-need-care-fee-payment-plans

https://societyoflaterlifeadvisers.co.uk/

http://www.wearejust.co.uk/products/care-funding-plans/

http://www.aviva-for-advisers.co.uk/adviser/site/public/products/retirement-solutions/lifetime-care

Relative's relative pays well over £60,000 a year for care and at the age of 95 has been in care for four years all but a few days.

Even if you want to keep ISA status, he can get better rate than 0.05%.

http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

He is getting Attendance Allowance?

AnotherJoe

Good point the OP did say

By my maths we will just be able to afford three or four years full time care in the home by using a combination of me, his pension and his savings

.

Adding rental income, though it is a lot of hassle and not without risk, might extend that especially since as said, the hard fact is that 3 or 4 years is likely to be all thats needed.

There will though, i suggest be some substantial costs to make a home that currently has an aged person living in it, and presumably has been there for many years, suitable for rental. To the tune of many thousands. Easily 12+ months rental income at minimum if a new bathroom and kitchen are needed.

Once father is in the care home, he doesn't need to know whats happened to the house anyway, theres no point telling him and he'll only get distressed, and then forget it and then you have to tell him again. (if this seems heartless, i had a fair few years of experience with a parent like this, say nothing is the best plan, even lying is better if it helps)

Chickereeeee

The approach I was thinking off (above) is the ‘deferred payments scheme’. The LA take a charge against the house, for any shortfall, and pay the care fees in full. In the meantime you can rent it out. There is an allowance made for annual maintenance, and you could use some of the ISA money to get the property up to to standard for renting out (this was allowed for in the scheme we used).

It can only be used if other assets are below the £23K threshold though: maybe spending the money to get up to renting spec, (and increasing the value when eventually sold...), would take you below this threshold.

The interest rate the LA used was quite low, but this will vary, according to LA.

An example is here: http://sid.southampton.gov.uk/kb5/southampton/directory/advice.page?id=12T8iWfhokA

Other local authorities should offer similar schemes.

C