Immediate Needs Care Annuity - where to find and how to choose a provider?

Sportacus

I'm wondering about getting this for my mother so she can move to a retirement home. We'd use her house sale to fund it. If you google search for this though, you don't get links to any well known financial institutions, you get links to what look like 'middlemen' companies that say they get quotes from the large insurers for you - all seems a bit suspect.

Anyone got experience of these?

DullGreyGuy

There are many financial products that you can only get from middle men, even if it's a middleman setup by a household brand. Probably worth you looking at https://www.unbiased.co.uk/discover/pensions-retirement/planning-for-retirement/what-is-an-immediate-needs-annuity-how-does-it-work 

dunstonh

 If you google search for this though, you don't get links to any well known financial institutions, you get links to what look like 'middlemen' companies that say they get quotes from the large insurers for you - all seems a bit suspect.

Mainly as not many "well known" financial institutions offer them.    Plus, most of them manufacture the product but don't retail the product.  They use "retailers" to retail the product.  Just like many other areas of retail.

Anyone got experience of these?

Try some local IFAs.  DDG has given the link to unbiased but they have turned their back on being an IFA directory to instead focus on salesforces paying them larger amounts for lead generation.  So, I wouldn't be so keen on unbiased use now.

Linton

For anything unusual like this you should consider working with an IFA to help choose the annuity most appropriate for your mother's needs.  Immediate needs annuities are a niche market.

See https://www.agespace.org/finance/self-funded-care/immediate-needs-annuities

xylophone

https://adviserbook.co.uk/

Ticj "confirmed independent" and "long term care" when the menu comes up.



https://www.immediate-needs-annuity.co.uk/about/ina-providers/

might be an avenue to explore.

wjr4

https://societyoflaterlifeadvisers.co.uk/

Sportacus

Thanks everyone, you've given me more confidence to look further into this.  One thing I've found in my research which seems very unfair is that care home fees are tax free when paid direct through such an annuity as discussed, but not when paid by the person in the care home. I was looking into a pension drawdown equivalent, where the sale of the house becomes 'the pension' to be used for paying the care home fees - my mother would need about £7000 a month after tax for the care home nearby, which means needing an income of over £10000 a month before tax!

LHW99

Hopefully she has higher rate Attendance Allowance, as well as SP to make at least a small contribution.

xylophone

One thing I've found in my research which seems very unfair is that care home fees are tax free when paid direct through such an annuity as discussed, but not when paid by the person in the care home. I was looking into a pension drawdown equivalent, where the sale of the house becomes 'the pension' to be used for paying the care home fees -

No go, I fear.

Relative had PoA for his relative who became too physically frail to live alone in the old family home after turning 91.

The property was sold and the money saved/invested to cover the  fees first in a retirement home and then in a care home followed by 

nursing home where she died aged 97..

She had state and widow's pension from her late husband's excellent  DB Scheme and Attendance Allowance (first lower then higher rate).

She was also entitled to the Winter Fuel Allowance,

When her needs required removal to a nursing home, she also became entitled to the "nursing care component" which is paid to the 

home and mitigates the fees a little.

https://www.nhs.uk/conditions/social-care-and-support-guide/money-work-and-benefits/nhs-funded-nursing-care/

wjr4

Sportacus said:

Thanks everyone, you've given me more confidence to look further into this.  One thing I've found in my research which seems very unfair is that care home fees are tax free when paid direct through such an annuity as discussed, but not when paid by the person in the care home. I was looking into a pension drawdown equivalent, where the sale of the house becomes 'the pension' to be used for paying the care home fees - my mother would need about £7000 a month after tax for the care home nearby, which means needing an income of over £10000 a month before tax!

If the money is in cash from house sale proceeds, it won’t be in a pension. Therefore no tax apart from interest on the money?

xylophone

The OP has not commented on his mother's existing financial position.

In terms of interest on the proceeds of the property (assuming simply deposited in interest bearing accounts), he should see

https://www.gov.uk/apply-tax-free-interest-on-savings

With regard to tax on INCA

https://www.moneyhelper.org.uk/en/family-and-care/long-term-care/immediate-needs-annuity#:~:text=An immediate needs annuity is,immediate care plan

Relative decided not to go INCA route.

He says that as he  recollects, total fees for care home ended up at around £ 5/6000 a month, of which about 40% was covered by

pensions/benefits, the balance by investment income/interest/drawdown from capital.