Immediate care needs annuity

lisyloo

She’s in the home with assistance of 2 to prevent falls.
She doesn’t need 2 to help her walk in a straight line but she needs 2 to get up out of chair without falling which is partly mobility/balance/strength and partly judgment/dimensia.
Her chances of falling whilst always attended are quite low.
She fell in 2017 at home which was a precursor to hospital and then nursing care so I’d say she was at much greater risk at home and much lower risk now.

The fees are
•£ 350.00 - To set up client record and obtain initial quotes, increasing to
•£ 750.00 - If report required (after considering quotes) increasing to
•£1,000.00 - To implement immediate care plan (or 1.5% of the purchase price if higher)

And the advisor is well known us and trusted.

The 3x is based on their experience.

I'm surprised that more people don't look into this but I guess it's not a well known way of financing care home costs

most people think it’s a huge rip off and way for insurance companies to get rich.

I don’t really see it as being any different to paying to insure rebuild your house or replace your car and not getting anything back. We’re paying to cover the risk not to get something from it or to try to win the bet.

LHW99

If it is any help, we were quoted £48k for an 88 year old with dementia and previous fractures, in 2013, which was a little less than 3 x the home fees at that time. However, fees were increased (by around 10%) about 6 months later due to deterioration and needing more intensive caring.

GunJack

Still trying to get my head around this......(thankfully have time as my parents are mid-70s and are fitter than most 60-y-olds)..

If £50k is around 3 years care home fees, how come common figures banded around on this board are £700-ish a week, that's more like £35k a year in fees...do the homes give big discount or are the £17k p.a. just cheaper care homes?

Not trying to be obtuse, just had no previous experience of such things (and hope not to have to, obviously...)

lisyloo

Not sure where £50k came from (I mentioned 50%).

There are several factors

Location
Level of care
Income

My mil pays £825 for her residential place in Bristol and nhs pays about £150 for the nursing, but that’s for somewhere that none of the people can move without assistance so need to be helped with dressing, toileting, washing and sometimes feeding.
She has about £300 per week income - sp & aa so we need £530 per week which is £27.5k per annum.

Varies a lot though depending on location, facilities and care level.

Do bear in mind your parents may never need residential care. It’s a minority that do and in some cases care can be provided at home.

GunJack

lisyloo wrote: »

Not sure where £50k came from (I mentioned 50%).

There are several factors

Location
Level of care
Income

My mil pays £825 for her residential place in Bristol and nhs pays about £150 for the nursing, but that’s for somewhere that none of the people can move without assistance so need to be helped with dressing, toileting, washing and sometimes feeding.
She has about £300 per week income - sp & aa so we need £530 per week which is £27.5k per annum.

Varies a lot though depending on location, facilities and care level.

Do bear in mind your parents may never need residential care. It’s a minority that do and in some cases care can be provided at home.

LWH99 mentioned £48k for 3 years, rounded up to £50k

Those figures you give kind of make sense, and hence my question of having to top-up the £17k annuity from her remaining 50% capital to make up the extra £10k p.a. to hit the £27k p.a. remaining after her income, or have I still misunderstood?

lisyloo

My initial intention would be to get the full £27.5k (increasing) covered for a cost of £82.5k ( or whatever the quotes say).
She can then keep the rest of her capital and only has personal expenses (or top up if in future the fees exceed the planned increase).

I think you can arrange it as you wish and I have yet to discuss with fa or family and the advice is an important step.
I believe you can choose the amount, annuals increase, deferred period etc. So that’s all a matter of choice so if you wish to take less and top up that fine.

For us it’s imperative she doesn’t run out of money for fees so we will arrange according to that requirement. I don’t think we have a big enough pot of money to rely on an infinite (or longer than expected) top up, so we might have to go 100%.

kkgree1

I totally agree with lisyloo's post.

My MIL pays £1200 per wk for nursing care and this is in Cambs. She previously paid £825 for residential care.

Her sister in London pays £1600 per wk so it is totally dependent on area and care home. £1200 is average for the Cambridge area in our experience though there are some cheaper homes (but not those we would want MIL to live in!).

Spreadsheetman

GunJack wrote: »

Still trying to get my head around this......(thankfully have time as my parents are mid-70s and are fitter than most 60-y-olds)..

If £50k is around 3 years care home fees, how come common figures banded around on this board are £700-ish a week, that's more like £35k a year in fees...do the homes give big discount or are the £17k p.a. just cheaper care homes?

Not trying to be obtuse, just had no previous experience of such things (and hope not to have to, obviously...)

My father's care home was just under £33k pa for basic residential care in 2018. He moved to the nursing wing, but the extra cost of that was covered by the NHS-funded nursing care.

That is almost the cheapest home in a poor area of the North East, so I would expect almost everywhere else south of there would be more expensive. This year was due to rise by 5.3% too, so care costs are running well ahead of inflation.

The local council pay a lot less than self-funding residents, so the on-line average cost estimates are deceptive.

GDB2222

lisyloo wrote: »

My initial intention would be to get the full £27.5k (increasing) covered for a cost of £82.5k ( or whatever the quotes say).
She can then keep the rest of her capital and only has personal expenses (or top up if in future the fees exceed the planned increase).

I think you can arrange it as you wish and I have yet to discuss with fa or family and the advice is an important step.
I believe you can choose the amount, annuals increase, deferred period etc. So that’s all a matter of choice so if you wish to take less and top up that fine.

For us it’s imperative she doesn’t run out of money for fees so we will arrange according to that requirement. I don’t think we have a big enough pot of money to rely on an infinite (or longer than expected) top up, so we might have to go 100%.

From what you have said, MIL is in pretty good shape physically. This may mean that the quote you get is a lot more than £82.5k. Are you prepared for that possibility?

lisyloo

GDB2222 wrote: »

From what you have said, MIL is in pretty good shape physically. This may mean that the quote you get is a lot more than £82.5k. Are you prepared for that possibility?

She has dimensia and has suffered dilerium after her fall in may 2017.
She might die tomorrow she might live a long time.
There is simply no way to quantify it but I certainly think there is a risk she could live a long time.
I have no idea how the actuaries view the medical info, but yes quotes could be far out from the ball park estimate.

I don’t think there is much point speculating but yes I’m aware of the limitations of the ball park which was merely to work out whether we want to consider it and proceed with quotes.

I’ll keep you updated but it’ll be a couple of weeks before I discuss with family.