Relative going into care

penrhyn

My mother is going into a care home, she will be self funding as she owns a small bungalow, has anyone been through this and can recommend any investment strategies for the proceeds of the property?
We are in England!
She is 92 and only has the state pension and attendance allowance as income.

dunstonh

investment options and care annuities would have to be costed up and compared along with a knowledge of the costs involved and income required.

EdInvestor

This report covers the main issues you need to grasp:

https://www.hsbcpensions.co.uk/nhfa/pdfs/is6.pdf

An immediate needs annuity will be good value at this age.

dunstonh

An immediate needs annuity will be good value at this age.

What information do you have about the OPs mother that the rest of us dont?

penrhyn

Care home costs at the moment are around £400 a week.
Income is the state pension + attendance allowance say around £150 a week.
The sale of the home should yield around £100,000.
Age as I said before is 92.
So its fairly obvious that the money will run out in a few years, when it gets down to £21,000 the state will start paying again, so I guess what I'm looking for is the best way preserving the capital for as long as possible.

margaretclare

It is sometimes suggested to rent out the property and to use the rental income to pay the fees.

Margaret

EdInvestor

If you look at the link I posted, a care annuity to provide an income of around 15,000 a year for a 92 year old (depending on her health) might cost around 45-50k, income guaranteed for life and tax free.

That would leave around 50k left over, with the interest providing some extra pocket money for the old lady and the capital available for an inheritance.The money would not "run out".

suzyq

Also dont forget to take out a funeral plan for her as this can come out of her savings now, rather than waiting until her funds have reduced to £21000

monkeyspanner

If the house is not yet sold and other than her house she has less than £21500 savings your Mum is entitled to assistance from the Council under the 12 week disregard rule. The council will pay for your Mum's care until the house is sold subject to a maximum of 12 weeks. You may have to push for the council to grant your Mum the 12 week disregard but it is a right and not optional for the council.

Your Mum will still be expected to contribute the bulk of her income except a weekly allowance of £20.45 (minimum) and may also be expected to make a first party top up of any fee between the assessed care need figure and the care home fee level.

Your Mum can also apply for a deferment where the Council will take a charge on your Mum's property and pay the fees. And recover the fees when the house is sold.

Dependant on your Mum's medical condition it may be worth requesting a continuing care assessment. If successful this would mean the NHS would pick up the cost of your Mum's care home fees. Continuing care is difficult to get and the primary need must be medical rather than domestic.

More info available from www.counselandcare.org.uk

Also it is worth bearing in mind that as your Mum's savings reduce she will probably become entitled to pension credit/savings credit. We were recently told to reapply when my MIL's savings got to around £67000. It is a complicated calculation based on age and savings.

You should also note that 10% of the house sale proceeds should be disregarded under CRAG regulations as sale expenses when assessing if your Mum should be self funding. We are waiting to hear if this applies only to the intial assessment or whether it can be taken into account when my MIL's savings reduce to the £21500 region.