Making the most of house sale capital to pay care home fees

Grumpy_chap

handyandy1 said:

No, the pension is in addition to that. With all the house selling shenanigans and working full time, I haven't given a thought to tax implications.....

Does he have private pension or only state pension?

EnPointe

Bigwheels1111 said:

Sorry Im not trying to be mean for eg.

But how is gaining interest on the funds benefitting said parent in a home.

Does it not just benefit the tax man and govenment.

Only asking as might be in this position with my Dad.

Interest / dividends etc are likely to  extent the  period that the OP's father can either self fund or contribute to any  remainder left  in his estate at the point of death  -as the OPs father is 94  and  apparnetly has dementia  exactly how long he has left is very  variable especially as it  appears  his move  into a 24 hour care setting is to  some degree elective rather than forced 

xylophone

I assume he is on full attendance allowance.  The care home manager told me that almost everyone in a care home should be on the highest rate.

My relative's donor only became eligible for higher rate when she moved for the second time.

handyandy1

Grumpy_chap said:

handyandy1 said:

No, the pension is in addition to that. With all the house selling shenanigans and working full time, I haven't given a thought to tax implications.....

Does he have private pension or only state pension?

Just the state pension

badmemory

I doubt it is just the basic state pension though as he will have serps etc if he was employed rather than self employed.

xylophone

I doubt it is just the basic state pension though as he will have serps etc if he was employed rather than self employed.

At his age, Father could potentially have been employed from the mid forties to the mid nineties.

Assuming a full employment history,  he could have  accrued Graduated  Retirement Benefit (between 1961 and 1975 and (as it appears he was never contracted out) State Earnings Related Pension between 1978 and 1995 when he would have reached SPA.

Grad won't be enormous - I think a  max of around £12 a week for a man, but  over fifteen years of SERPS for  a person who was on a good salary  would add considerably more.

Higher Rate AA would give him over £5000 a year and if he receives nursing care through NHS, there would be a modest reduction in his fees.

As a self funder, he would also be eligible for  Winter Fuel Allowance.

Bobziz

NHS funded nursing care (FNC) payments are definitely worth checking out at >£11k per year. Many with dementia are eligible. It goes directly to care homes though and some apply it differently.

handyandy1

Thank you for all the help, I feel more confident about the way forward! Here's the plan....
I'll deposit the cheque into his current Barclays account today, and transfer a years worth of care home fees into an easy access saver account that he already has. I have access to this account as POA and have been paying the fees from his (now diminished) savings since he moved in to the home in July.
I intend to get an ISA for this current year and another one after April when the new allowance kicks in. I will look at savings accounts for the remainder.
I am aware of the 85k govt guarantee and will take that into account also that some institutions are connected and the guarantee applies only once in that case.
Lastly, I presume I should open any new accounts in his name, specifying I am acting as POA, rather than just opening accounts as him if that makes sense?

cloud_dog

Hi @handyandy1... Having gone through exactly  the same with my mother, we decided firstly that investments weren't an option (fairly obvious perhaps), and so a range of cash savings accounts were set up.

There were some restrictions due to LPA being in force but we set up a straightforward savings bond ladder, e.g. 1 year fixed rate, 2 year fixed rate, etc.  We were able to open a 90 day notice account and an easy access account.

The basic function was that the easy access account held sufficient for 3 to 4 months costs.  The notice account received the maturing fixed rate via transfers from the paid out current account (with notice being given appropriately).  And that is how we cycled the money as effectively as we could.  We utilised ISAs as and when it made sense.

mebu60

handyandy1 said:

Lastly, I presume I should open any new accounts in his name, specifying I am acting as POA, rather than just opening accounts as him if that makes sense?

Yes. [10 chars]