Pension & ISA savings, and later life care costs

Robert_McGeddon

The thought of 30k per year being taken from hard saved retirement funds / estate is quite depressing.
Originally posted by PJM_62

FYI £30K pa may be low. My Mum is in a nursing home (not one of the flashier ones) in Harrow. She's being invoiced £1,050 per week. Additionally, the nursing home gets approx £150 per week from the NHS as a 'nursing component' or similar.

lisyloo

Robert_McGeddon wrote: »

FYI £30K pa may be low. My Mum is in a nursing home (not one of the flashier ones) in Harrow. She's being invoiced £1,050 per week. Additionally, the nursing home gets approx £150 per week from the NHS as a 'nursing component' or similar.

My MiL pays £925 residential in Bristol (yes London and Se is more expensive). NHS funded nursing care is additional £156.

But don’t forget state pension and attendance allowance would be coming in even if there was zero private pension. Our figure is £33k and I’d suggest Bristol is more average than Harrow.

You need to include income which will be taken in every scenario (minus approx £25).

Most people in a nursing home receiving nhs funded nursing care will get attendance allowance of £86 in addition to state pension. This is not means tested.

But yes definitely more expensive in London and se.

Also not everyone will need the most expensive nursing care.
Some people may be able to be in residential care without nursing which is cheaper.

theboots

Linton wrote: »

Care home costs are more than £2K/month. £3K/month would perhaps be closer and it could well be more depending on your needs

Yup, my father was £1250 a week after his stroke plus the extra equipment we had to buy, luckily for him given the state he was in he only spent 5 months there.

DairyQueen

lisyloo wrote: »

But all income also has to be handed over (minus around £25 for personal spend), this includes state pension and attendance allowance.
As per Linton post I’d expect SIPP to count as income (unless below 55).

Per my previous post:
Income is only assessed if the non-excluded assets exceed the £12,250 minimum threshold, and the capital value of pensions are an excluded asset.

If the capital threshold is breached, then income from the value of any DCs/SIPPs is calculated and included in the individual's contribution toward fees.

Pensions only form part of the assessment when the person requiring care reaches pension credit qualifying age (i.e. SPA), not age 55.

lisyloo

DairyQueen wrote: »

Per my previous post:
Income is only assessed if the non-excluded assets exceed the £12,250 minimum threshold,

Do you have a link please for income being disregarded?
Or are you specifically referring to private pension income.

My MIL had to hand over her income of state pension and AA minus £25 when she was LA funded and below the threshold.

Either you’re wrong, we’ve been overcharged or I’m misunderstanding your post.

lisyloo

If the value of the above calculation is < £14,250 then the LA will pick up the entire tab.

I think this is incorrect.
I think income minus £25 approx is taken.

I’ve been through the LA funding assessment below the capital threshold and I’m pretty sure the LA know what they are doing.

xylophone

30k per year

Not in the SE - think well over £60,000 a year, and that's after the nursing care allowance.

crv1963

Regardless of which area someone lives in care home fees are going to take a big chunk of a persons income/ assets/ savings.

For early retirement we are to answer OP original question going to have a savings pot of around 40k (the cost near us of self funding for a year) put aside, with the idea that the first of us to need it will be at home for as long as possible before entering the dreaded care home, and the second to go into a care home can run down the remaining funds in the DC pot, any residual savings and the equity in the house to fund any care needs.

Part of the plan for us is POA, making sure that we have clear records of i) what we have, ii) where it is and how to access it and finally iii) the order to use it in.

Given that most people do not last that long once a care home is needed- with noteable exceptions- we hope that we will leave something for the next generation but by gifting while alive and well we can see them using and enjoying it as it is gifted.

lisyloo

Just to add you can buy a care needs annuity when you need long term care.
I looked at this for my MIL female and 91 and my IfA said ball park was 3xannual fees which for us was around £100k (net of income).
We decided not to proceed, but for some this may be a solution.
Like all insurance in most cases you are going to overpay but if you want to pass on the risk of long term fees then this is a way to do it.

Keep_pedalling

If you can do, make sure you have the assets to self fund. This is the reason we have not been too aggressive in IHT planning. Selling your home is an option if no one else needs to live there, but it does not help if there are two of you or, if like us, you want to opt for live in careers.

Hopefully we will never need it but financial planning for our latter years includes the ability to fund 10 years of care (5 each) without the need to sell the house.