Financial Advice - Elderly parent care

vpdbac

Hi, 
how do we choose someone who can provide sensible financial advice for how we look after my dad please? Everyone seems to have different advice! (that always seems to benefit them funnily enough). Happy to pay for independent advice. How much should we budget for this?


He's 80yo with severe dementia. His health has been up and down this past few months. Thought we were going to lose him in early Sept but after six weeks in hospital he was able to go into a care home. Around 7 weeks after being in a care home he was able to come home and we've now some private carers coming in 3x a day to assist. 1hr mornings, 30mins evening meal time, 30mins bedtime. Care bill is around £2400pm but could go up I guess. 

He has a property worth £240k ish. A pension account with St James Place with around £86k in and maybe £3k in an ISA.

We have bills of around £5k to the care home and £2500 to the care company for services already provided.

We're filling in the Attendance Allowance form now but that's only £75ish a week but does mean we won't pay for council tax.  

The St James Partner recommends a drawdown(s) for it's flexibility but we'll pay tax on that. So an immediate needs annuity seems better suited but we aren't sure how to make that work. The care company are happy to receive money from the annuity but working out how much to ask for is tricky. 

We've been advised to postpone the financial assessment from the council for as long as we can. We know about the £23k savings threshold and we've had mixed advice from various people over whether the retirement account (pension) counts as income, or savings. 

I'm guessing a small drawdown to cover the immediate bills and then an annuity for the rest is the most tax efficient?

So, how do we choose someone who can give reliable and independent advice please? We clearly aren't the only people going through this.

Thank you for reading.

Keep_pedalling

What income does he have? Has the SJP fund been touched? If not there 25% can be taken tax free. 

PS I don’t think this is the most appropriate board for this and have asked for it to be moved in order for it to get better visibility.

Brie

Is he living in his own place or living with you?  If he's living with you and has severe dementia then he should be eligible for the full AA which is (I think) about £100/week.  This would be on the basis that he can never be left on his own.  

And whether he gets an annuity or take drawdown there will be tax to be paid.  Income is income wherever it comes from.  I'm not sure what kind of annuity you've been looking at but some are for the life of the individual only.  Others can be for that life but guaranteed for 10 or 20 years.  Given his health and the dementia there's no guarantee how long he'll be around (sorry to be blunt) so you have to consider what will be best for him rather than the possibility of you or someone else inheriting the annuity (sorry more bluntness).  Drawdown is flexible and annuities are pretty fixed so a decision has to be made at some point.

I always suggest making a spreadsheet of all income (state pension, various drawdown/annuity situations) versus expenses now and if he goes to a care home permanently.  If he is living with you it is perfectly reasonable that he pay something towards his expenses for being there (MiL paid a portion of council tax, utilities as well as food and sherry).  Maybe look at how long a care home would be paid if his house is sold, savings cashed in and he had the annuity at the maximum amount.  

Sounds like he is currently self financing and will continue to do so for some time.  So the council has no need to do a financial assessment as it's just going to show the obvious - that he has too much money to get their support.  Consider also if he goes into a care home that if it's particularly nice it may be too expensive for the local authority to pay for in the future.  This doesn't need to limit you but it helps to know, even vaguely, in advance.  For reference our LA were paying a bit over £1k a week for MiL when she needed to go into a home.  Not one I might have picked but clean, good staff, so no complaints.

Age UK will have advice on some of this.  Age UK | Let's change how we age

elsien

Not sure what the purpose of delaying any local authority financial assessment would be because if he is self-funding it’s irrelevant at the moment anyway? 

He would owe whatever is due regardless of the timing of the assessment.

OldMusicGuy

If your parent will be permanently in a care home and self-funding, then definitely look into an immediate care needs annuity. You need to find an adviser that is a member of SOLLA (Society of Later Life Advisers, https://societyoflaterlifeadvisers.co.uk/) as they can arrange this type of annuity. Like you say they are paid direct to the care provider and are tax free. We used a SOLLA adviser to arrange one of these annuities for my FiL and it was a great solution for him. 

SJP are generally not highly thought of in these parts and personally I would stay well clear of them for any advice on this situation. 

gm0

+1 for the SOLLA accredited adviser to discuss and perhaps quote for immediate needs (specailist) annuity.  As an option,  If you want to look at that to understand the tradeoffs.

Any other IFA or FA who is not accredited for the special kind Is not that useful. 

It is inevitably very scenario dependent.   We made an estimate in the crisis stage with elders. And we didn't  understand the full picture.  Their home.CT exemption. Time to forced sale. Time to asset exhaustion. 
Benefits. Spending changes reducing all other draw on pensions.    We badly overestimated the rapidity of asset depletion. Despite high weekly care fees.  From lack of familiarity with the other things.

We did not panic.  And in our case we let things settle and decided not to do an INA. Still self funding some years later.  

It's also a function of family and visiting plans. Locations.   Whether the care home  is LA suitable when self-funding is exhausted (mixed).  And crudely.  Remaining life expectation based on disease progression and other conditions and age.

Good luck.  It settles down.