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Royal London Platinum Bond Plus and care fees

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My mother's cash savings have dipped under the ~£23k.

Alongside her savings she has a Royal London Platinum Bond Plus https://www.royallondon.com/existing-customers/your-products/manage-your-investment/platinum-bond-plus/ at around £30k.This was taken out around 20 years ago. 

The bond is described as "a lump-sum ‘with-profits’ investment" and it is also stated that "Platinum Bond Plus is also a life assurance policy. When the person covered by the plan dies, we'll pay 101% of the plan value plus any further bonuses added at that time"

I have seen that Annex B, paragraph 54 of the care and support statutory guidance https://www.gov.uk/government/publications/care-act-statutory-guidance/care-and-support-statutory-guidance states that:
"
54. Where an investment bond includes one or more element of life insurance policies that contain cashing-in rights by way of options for total or partial surrender, then the value of those rights must be disregarded as a capital asset in the financial assessment."

My questions are:
* Is the Platinum Bond Plus the kind of thing that paragraph 54 is referring to?
* When having a financial assessment with the council do I need to mention the Bond and refer to clause 54 or should it be excluded from the discussion? My assumption is the former option.
* Do I ideally need an IFA to say if it complies and then fight my corner if it does and I get push back?

Comments

  • poseidon1
    poseidon1 Posts: 1,428 Forumite
    1,000 Posts Second Anniversary Name Dropper
    Matt002 said:
    My mother's cash savings have dipped under the ~£23k.

    Alongside her savings she has a Royal London Platinum Bond Plus https://www.royallondon.com/existing-customers/your-products/manage-your-investment/platinum-bond-plus/ at around £30k.This was taken out around 20 years ago. 

    The bond is described as "a lump-sum ‘with-profits’ investment" and it is also stated that "Platinum Bond Plus is also a life assurance policy. When the person covered by the plan dies, we'll pay 101% of the plan value plus any further bonuses added at that time"

    I have seen that Annex B, paragraph 54 of the care and support statutory guidance https://www.gov.uk/government/publications/care-act-statutory-guidance/care-and-support-statutory-guidance states that:
    "54. Where an investment bond includes one or more element of life insurance policies that contain cashing-in rights by way of options for total or partial surrender, then the value of those rights must be disregarded as a capital asset in the financial assessment."

    My questions are:
    * Is the Platinum Bond Plus the kind of thing that paragraph 54 is referring to?
    * When having a financial assessment with the council do I need to mention the Bond and refer to clause 54 or should it be excluded from the discussion? My assumption is the former option.
    * Do I ideally need an IFA to say if it complies and then fight my corner if it does and I get push back?
    You may find the following article from Canada Life useful guidance -

    https://www.canadalife.co.uk/technical-support/investment-bonds-and-long-term-care-assessments-england-only/#:~:text=Deliberate deprivation,regulators' view on the matter.

    Personally, I find it anomalous that investment bonds with their minimal life assurance content have been granted by parliament  disregarded asset status for financial assessment purposes, but so be it. 

    I see no reason why your mother's with profit bond should not qualify, especially since it is clear it was not taken out in anticipation of needing social care.

    As you will see from the article, Local Authorities are encouraged to take legal advice on the issue, but clearly the onus of proof is on them to show your mother's bond falls outside the ambit of paragraph 54.

    You should certainly declare the bond but claim protection of the paragraph. I see no reason why an IFA would be a suitable advocate if the need arose. They are not legally qualified.
  • dunstonh
    dunstonh Posts: 119,781 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    * Is the Platinum Bond Plus the kind of thing that paragraph 54 is referring to?
    yes

    * When having a financial assessment with the council do I need to mention the Bond and refer to clause 54 or should it be excluded from the discussion? My assumption is the former option.
    Whether mentioned or not, it should be disregarded as long as there are no withdrawals from it.  It should be mentioned that it is a single premium whole of life assurance. 

    * Do I ideally need an IFA to say if it complies and then fight my corner if it does and I get push back?
    You don't need an IFA to do that but if the means test includes it in error and they are not removing it then you could go down that route.

    Personally, I find it anomalous that investment bonds with their minimal life assurance content have been granted by parliament  disregarded asset status for financial assessment purposes, but so be it. 
    Its a hangover from the days of endowments.  i.e. if you needed benefit support then why should someone on a repayment mortgage get it but someone with an endowment mortgage not.   Its never been changed since then.

    Investment bonds went out of fashion when the dividend rules changed and pushed GIAs ahead of investment bonds in the pecking order.   So, they probably didn't see the cost of changing the law vs what difference it would make as a worthwhile thing to do.    However, investment bonds are back in fashion again now that the CGT allowance is low.

    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.
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