How much to live on

shabbychic12

Your right jackieblack but l can only make my decisions based on my life experiences as lm sure you do as none of us has a crystal ball. As we get older our needs will change in many ways not just care but relationships. Look how many older couples divorce in later life as they cannot bear to spend their twilight years with the same person, how many of us plan for that. Children returning home for financial reasons of their own are also a big drain on older peoples finances. We can only make certain plans based on what we know now and in my case that’s exactly what lm doing and living my best life.

MarzipanCrumble

Has anybody had experience of getting a care annuity for somebody going into care?  I do believe these exist and wonder if a solution to 'protecting the inheritance'.  I am ambivalent about 'protecting the inheritance' - I sit very much on the fence in that if I need to go into care and have cogniance then I want to pay whatever to get a good one.  If not, I won't care or know.

[Deleted User]

MarzipanCrumble said:

Has anybody had experience of getting a care annuity for somebody going into care?  I do believe these exist and wonder if a solution to 'protecting the inheritance'.  I am ambivalent about 'protecting the inheritance' - I sit very much on the fence in that if I need to go into care and have cogniance then I want to pay whatever to get a good one.  If not, I won't care or know.

 Totally agree with your ending comments about care and inheritance. I find it baffling that some people are so concerned about leaving something that they go without during the latter part of their lives. Likewise I have no time for relatives who place protecting their anticipated inheritances above the well being of others or look for dubious ways of getting past the rules. 
Fortunately as a family we are more concerned with quality and well being. Although I have no direct dependants my extended family know(and willingly accept) that anything I leave is a bonus not a given.

WYSPECIAL

I have known someone who had a care annuity. 

They were self funding and the concern was that the money might not last as long as them and the family wanted to ensure that they wouldn't run out of money and then be moved by the council.

As it happens with the time they ended up spending in care, just over five years so over twice the average, it wouldn't have mattered. But the peace of mind it gave was worth it.

The annuity was taken to protect the person, their dignity and their care. 

No thought was given to protecting the possibility of an inheritance.

[Deleted User]

WYSPECIAL said:

I have known someone who had a care annuity. 

They were self funding and the concern was that the money might not last as long as them and the family wanted to ensure that they wouldn't run out of money and then be moved by the council.

As it happens with the time they ended up spending in care, just over five years so over twice the average, it wouldn't have mattered. But the peace of mind it gave was worth it.

The annuity was taken to protect the person, their dignity and their care. 

No thought was given to protecting the possibility of an inheritance.

So in this instance a care annuity was an excellent solution.

DT2001

[Deleted User] said:

MarzipanCrumble said:

Has anybody had experience of getting a care annuity for somebody going into care?  I do believe these exist and wonder if a solution to 'protecting the inheritance'.  I am ambivalent about 'protecting the inheritance' - I sit very much on the fence in that if I need to go into care and have cogniance then I want to pay whatever to get a good one.  If not, I won't care or know.

 Totally agree with your ending comments about care and inheritance. I find it baffling that some people are so concerned about leaving something that they go without during the latter part of their lives. Likewise I have no time for relatives who place protecting their anticipated inheritances above the well being of others or look for dubious ways of getting past the rules. 
Fortunately as a family we are more concerned with quality and well being. Although I have no direct dependants my extended family know(and willingly accept) that anything I leave is a bonus not a given.

I think for some the desire to do the best for their children/grandchildren influences their spending but also having spent a live being careful it can be difficult (psychologically) to spend one’s savings.

As my mother past about 85 she abdicated financial responsibility to her children (mainly me) which was fine. We sorted everything onto DDR etc and she took her pension in cash weekly. Anything bigger she just asked and we said yes and then sorted payment (we sorted LPA’s for wealth and health). She needed care, at home and then in a home (about 15 months) as dementia set in at about 90, all funded from downsizing in the S East to the West Country. I had foreseen a potential need for care and funds were invested in an LV bond giving steady returns which would have allowed for another 5/6 years of care (£1k+ p.w.). I think if she had been aware of the cost it would have upset her. All of her children were better off than her so. We are helping our children now and allocating the potential care costs to our property (5/6 bed house).

Great thread.

blue.peter

MarzipanCrumble said:

Has anybody had experience of getting a care annuity for somebody going into care?  I do believe these exist and wonder if a solution to 'protecting the inheritance'.  I am ambivalent about 'protecting the inheritance' - I sit very much on the fence in that if I need to go into care and have cogniance then I want to pay whatever to get a good one.  If not, I won't care or know.

When you say "care annuity", I think that you probably mean what I (and the relevant tax legislation) call an Immediate Needs Annuity. These are Purchased Life Annuities that are subject to special tax treatment as long as the income is paid directly to the care provider. More info can be found here. Whilst I don't have experience of getting one, I do have some experience from the other end: I used to work in the annuities department of an insurer that offered them. That was some years ago, though, so things might have changed since then. However, from memory:

• The market is very small - IIRC, there were only two providers in it when I was involved.
• Because the life expectancy of a person going into care is often quite short*, the rates can be quite favourable. And the tax treatment makes it a more attractive proposition.
  
• These annuities are so specialised that they are only sold through IFAs, and the number of IFAs who'll touch this business is small.

In any case, I'd recommend talking to an appropriate IFA even if it wasn't a necessity. If nothing else, that way you'll be able to look at some numbers and see how it stacks up in your case.

* But not always - my mother has been living in a care home, with Alzheimer's Disease, for over seven years now.

BooJewels

I did try to buy an immediate needs annuity for my father about 3 or 4 years ago.  As you say, at that time they could only be sourced through a limited no.of IFAs and only three companies offered them. 

After several months, one had said they couldn't quote, one had quoted and we were waiting on the third.  I never did find out how much it might have cost as he died before the final quote and the IFA wouldn't ever give me the one quote she had, so we never learnt how much it might have cost.  So I wasn't that impressed with the whole 'secret squirrel' nature of the arrangement.  If I'd had a better experience, I might have looked at getting one for myself, but it put me off a bit.

Yankee24

I’m an American expat of 30 years and both my parents were in care for short amounts of time in the USA.  The stats there are the same-   Few do require nursing home care, many do require home help.  Unfortunately, you only remember the nursing home experiences that you see….   And they are emotional.   The USA pioneered the “nursing home ins” policies and my father got an amazing deal.  He was so proud of it for over 20 years…,  when the time came, he didn’t last the 90 days you have to self pay first and neither did my mum.  He would have been soooo mad!   Still makes my brother and I laugh.  But as we say, it helped him sleep peacefully.  

Anyhow, seeing those nursing costs, it made my husband and I radically rethink.  We both inherited and we passed it straight thru to the kids who were 20 and 22.  It’s all managed by the family ifa so we have little concerns they are going to go and blow it.  This has been proven correct. They know they are privileged and plan to use it for houses etc.  now my husband and I think we have done our bit with them.  We help them out with extras whilst we are still working-   Childcare fees and tempting them with nicer holidays than they can afford, but that will go down as and when we retire.  As gifts are regular and out of income, there should be no short term issue.  If we need care, the house will cover that.  This completely takes away any planning complexity or silly worries about leaving inheritance.  We were in our mid 50s when we inherited we didn’t need it then.  We needed it when we were thirty.  

Albermarle

Yankee24 said:

I’m an American expat of 30 years and both my parents were in care for short amounts of time in the USA.  The stats there are the same-   Few do require nursing home care, many do require home help.  Unfortunately, you only remember the nursing home experiences that you see….   And they are emotional.   The USA pioneered the “nursing home ins” policies and my father got an amazing deal.  He was so proud of it for over 20 years…,  when the time came, he didn’t last the 90 days you have to self pay first and neither did my mum.  He would have been soooo mad!   Still makes my brother and I laugh.  But as we say, it helped him sleep peacefully.  

Anyhow, seeing those nursing costs, it made my husband and I radically rethink.  We both inherited and we passed it straight thru to the kids who were 20 and 22.  It’s all managed by the family ifa so we have little concerns they are going to go and blow it.  This has been proven correct. They know they are privileged and plan to use it for houses etc.  now my husband and I think we have done our bit with them.  We help them out with extras whilst we are still working-   Childcare fees and tempting them with nicer holidays than they can afford, but that will go down as and when we retire.  As gifts are regular and out of income, there should be no short term issue.  If we need care, the house will cover that.  This completely takes away any planning complexity or silly worries about leaving inheritance.  We were in our mid 50s when we inherited we didn’t need it then.  We needed it when we were thirty.  

Your comments about giving big gifts to family when they are younger/need it make a lot of sense.( if possible of course) 
The only caveat is that for those living off largely  DC ( invested) pensions ( or planning to) it is mainly/partly a self funded retirement. The financial outcome in terms of income/how long it lasts/how much will be left, can be within very wide limits, and of course somewhat unpredictable. Therefore a big safety buffer is needed, and you might be quite old before you feel confident to start giving away significant amounts. Otherwise you might be calling on the adult children to hand some of the money back !