DB and DC rules - who can help?

madaboutspots

What an absolutely superb reply! 

So factual, informative - I feel so grateful. 

I always thought my Dad sadly overly worried about this and then never needed his stash he wouldn’t use. I wanted to consider the costs without sacrificing life for them. I feel I have a definite understanding on options now to plan around. 

Brilliant response! I really can’t thank you enough x

Malthusian

madaboutspots said:

We are quite determined to do neither of these! I just don’t really get my head around what sort of provision we should make for the care possibility without sacrificing our actual retirement. Any comments to help me along?

I agree with AndrewB22 - most people who expect to pay for their care are covered by the capital in their home. One partner in care and the other wanting to stay in the family home is the most awkward scenario, but they have options, including equity release or the independent partner downsizing.

The average stay in a care home is two years with a long tail, and the long tail - the risk of someone going on in care for years and years - can be covered by buying an Immediate Needs Annuity. (Although most choose to self-insure.)

I would be inclined to leave cash (however much left) to charities. Have the house/contents as our “care plan” and the one adult child get what’s left if neither of us needs care. We work in funeral so acutely aware of how things tend to go towards the end and how young we could both go as well.

Never leave a percentage of your assets to charities, always leave a fixed £ amount. Charities are known to use blackmail against the other beneficiaries to extract a higher amount if the legacy is non-specific.

Bear in mind that a Will along the lines of "My cash to charities, my house to Child" would result in your entire estate going to charities if the house had been sold to fund your care. (And you can't update your Will if you're in care due to lacking capacity.)

In general, any attempt to leave floating legacies along the lines of "house minus care costs to child and the rest to charity" is a bad idea. All the ways of trying to do it have a high risk of unintended consequences.

The aim quoted above seems incompatible with the later aim of "Leave Child a sensible (i.e. small) amount" - if neither of you spent much on care, the proceeds of the house could be considerable.

Albermarle

Yes NEST - I will speak to hubby as I’m sure we can suggest a different company for pensions than the one our (fairly useless) accountant picked. As they contribute I’m sure we need to agree to move all of us - as there’s only 3 employees and we’re 2 of them I’m sure we can get this done. Are there any performance or reputations tables that we can look at or any particular choices/details we should consider? As for the pension wise/IFA info - thank you! 👍We’re definitely medium/low risk and incredibly unlikely to self manage. I just don’t think we have the right level of interest/energy for it. We currently have all of our current “live” acc in green/ethical as that fits better with our morals. 

My comments about NEST where only to clarify the fact that it being government owned made no difference, and was not really relevant to your pension provision. As already said there is nothing specifically good or bad about Nest, and to answer your question , comparing pensions is not that simple . Also how you invest within a pension is much more important than the choice of pension provider .

Also if you employ an IFA they will almost certainly want to move you to one of their favoured pension providers anyway . Some pension providers will only work via an IFA and not direct with the public.

You got some good comments about the subject of care in later life. However as you mentioned it probably is not worth worrying about too much at this stage as only a minority of older people go into care and even then usually only for around 18 months on average. Also mentioned was that 24/7 care at home was expensive. Again though I think that although some care in the home is quite common , most of it is not 24/7, so less expensive.

Thrugelmir

Malthusian said:

Never leave a percentage of your assets to charities, always leave a fixed £ amount. Charities are known to use blackmail against the other beneficiaries to extract a higher amount if the legacy is non-specific.

A % is specific. Once the estate is liquidated and held in cash. Straightforward enough to calculate. Transparent as well. 

AndrewB22

Malthusian said:

Never leave a percentage of your assets to charities, always leave a fixed £ amount. Charities are known to use blackmail against the other beneficiaries to extract a higher amount if the legacy is non-specific.

I didn't know that, thank you.  I might, um, have to change my will...

Nebulous2

Thrugelmir said:

Malthusian said:

Never leave a percentage of your assets to charities, always leave a fixed £ amount. Charities are known to use blackmail against the other beneficiaries to extract a higher amount if the legacy is non-specific.

A % is specific. Once the estate is liquidated and held in cash. Straightforward enough to calculate. Transparent as well. 

There have been cases where the charity has contested the liquidation. Argued that the house is being sold too cheaply and challenged the sale - or said they will agree to the sale if their percentage is based on their view of its worth rather than the sold price.  A fixed sum would prevent that. From the charity viewpoint however if you live a long time the fixed sum's value would be eroded by inflation. 

madaboutspots

There was me thinking charities would be grateful. Doh!