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Investing to pay care fees



I have a somewhat basic if limited understanding of investments e.g: all my investments are in Equities.
What I need to get my head around is; how could investments be used to fund care home fee's e.g: let's say a property is sold on behalf of a parent and you want to invest the proceeds to help fund the care costs. Given the known downside risks of investments, is this even possible and if so how it be done in terms of suitable products?
I completely get it if my mother had been putting money aside into a tracker or funds for the last 15/20 years but in this case where a property is sold and you have cash proceeds to invest in a relatively short timeframe how is that done usually and how are suitable investment products chosen? Is it simply a case of low equities exposure or defensive/wealth preservation funds being used?
*Just to add I have a deputyship for my mother and have no plans to make any decisions on her finances without explicit approval from the CoP/OPG.
Comments
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Care annuities are one option.1
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Given the known downside risks of investments, is this even possible and if so how it be done in terms of suitable products?
Yes it is possible but nowadays, it is not often considered suitable. The average life expectancy for someone in a care home is under 2 years. So, investing into assets that should be held for 5-10 years is generally not considered to be suitable unless there are other justifications.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.3 -
dunstonh said:Given the known downside risks of investments, is this even possible and if so how it be done in terms of suitable products?
Yes it is possible but nowadays, it is not often considered suitable. The average life expectancy for someone in a care home is under 2 years. So, investing into assets that should be held for 5-10 years is generally not considered to be suitable unless there are other justifications.
I'm surprised at the average 2 years life expectancy figure though..my father was in a nursing home much longer...>12 years combined in residential and nursing homes albeit not with Alzheimer's.
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noclaf said:dunstonh said:Given the known downside risks of investments, is this even possible and if so how it be done in terms of suitable products?
Yes it is possible but nowadays, it is not often considered suitable. The average life expectancy for someone in a care home is under 2 years. So, investing into assets that should be held for 5-10 years is generally not considered to be suitable unless there are other justifications.
I'm surprised at the average 2 years life expectancy figure though..my father was in a nursing home much longer...>12 years combined in residential and nursing homes albeit not with Alzheimer's.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
dunstonh said:noclaf said:dunstonh said:Given the known downside risks of investments, is this even possible and if so how it be done in terms of suitable products?
Yes it is possible but nowadays, it is not often considered suitable. The average life expectancy for someone in a care home is under 2 years. So, investing into assets that should be held for 5-10 years is generally not considered to be suitable unless there are other justifications.
I'm surprised at the average 2 years life expectancy figure though..my father was in a nursing home much longer...>12 years combined in residential and nursing homes albeit not with Alzheimer's.0 -
Would a "pots" system work?
Keep £x cash for the immediate future (1-2 years), then lower risk investments for medium term (3-7 years) and more adventurous funds for the long term (7+ years).
I suppose it does depend also on the size of total funds available v. annual care costs.
There could be a risk of the pot running out in the long term, if it's all kept in cash, or running out in the short term if investments tank.How's it going, AKA, Nutwatch? - 12 month spends to date = 2.60% of current retirement "pot" (as at end May 2025)0 -
Sea_Shell said:Would a "pots" system work?
Keep £x cash for the immediate future (1-2 years), then lower risk investments for medium term (3-7 years) and more adventurous funds for the long term (7+ years).
I suppose it does depend also on the size of total funds available v. annual care costs.
There could be a risk of the pot running out in the long term, if it's all kept in cash, or running out in the short term if investments tank.0 -
As a Deputy you have to ensure everything is for your mother's best interests. If she has never invested in stock market funds, it is probably not sensible for you to start to do so on now her behalf. There are independent advisers who specialise in this area, and that may be a good place to start.
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May be worth looking at this if you've not already done so: https://www.gov.uk/guidance/investing-for-someone-as-their-attorney-or-deputy1
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If your still wanting to invest, after all the reading you have done, I would probably put it in wealth preservation funds and may also consider income funds too, but not equities if it is for care home fees due to life expectancy and investment windows not matching.
Premium bonds would be a good shout if your risk averse"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0
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