Peps & Joint names

dlcs

Hi

Hope someone can help, I'm not up on all the terminology but the situation is-

My grandparents had some money to invest approx 20 years ago when they built and sold a house, they were recommended to invest it in a 'PEP' but only in my grandads name, now that my grandad is in a nursing home full time with parkinsons disease they decided to withdrawal the money and put it in their joint account so my nan could have access to pay bills etc.

She has also recently changed her will so that her half share goes to her children rather than to my grandad as he is unable to do anything with it.

After a recent assessment of their financial situation to work out how much my grandad has to pay towards his care, my nan has been told that she can't touch a penny of the funds transferred from the pep as it was in my grandads name, even though 20 years ago it was both of theirs!!

Have they been given the correct advice as my gran is deeply upset that she won't be able to leave her children the money she worked for?

Many thanks

RayWolfe

PEPs were always only in one one name ... the P stands for Personal.
If your Grandad needs care and can pay for it, isn't that more important than you getting a windfall?

Primrose

If this was in fact jointly owned money which was put into a PEP I think your grandparents were, in fact, badly advised as any financial advisor would have known that PEPs could only be held in individual personal names, and why the money wasn't split equally with both your grandparents have their own PEPs I do not know. That is history, and whether they have a case for being misadvised they may wish to investigate if the financial advisor is still around. It would have depended on how far into the future they were looking and whether they envisaged this kind of scenario when they were talking to their advisor. The reality now is sadly that your grandmother cannot access this money. Even if she had Power of Attorney and had the power to liquidate the PEPs and split the money, I think Social Services would deem that doing this your granddad would be deliberately depriving himself of capital and they would not fund his care. This is sadly a lesson to all married couples that when we are arranging future finances, we need to think how we will cope financially in the very long term if such unfortunate circumstances arise and try to ensure that both partners will have funds available to them if one of them has to go into care.

dunstonh

If this was in fact jointly owned money which was put into a PEP I think your grandparents were, in fact, badly advised as any financial advisor would have known that PEPs could only be held in individual personal names, and why the money wasn't split equally with both your grandparents have their own PEPs I do not know.

Splitting it was a possible option but you do need to remember that PEPs often had higher minimum contribution limits than ISAs and it may not have been possible to split.

Also, use of the PEP is best advice. Back then PEPs were miles ahead of any alternative. So there would be almost no chance of getting it classed as a mis-sale. Indeed, failure to use a PEP would stand more chance of it being classed as a mis-sale.

It would have depended on how far into the future they were looking and whether they envisaged this kind of scenario when they were talking to their advisor.

Almost certainly not considered. I don't see why the funds cannot be touched though. The grandfather can still sign and if he is unable to do so then his attorney (under a POA) can do so on his behalf (as you say)

There is no logic in saying nothing can be done with the money as that is not correct.

Financial advisers are not allowed to make recommendations which can be seen as deliberate deprivation of assets. Indeed, any professional being made aware or suspecting that this is the case would have a duty to report it.

my gran is deeply upset that she won't be able to leave her children the money she worked for?

Who is going to pay the care costs if they dont then?

dlcs

Hi,

Thank you for your responses of which some have been very informative and others seem to have missed the point or not understood my question! Of course they should pay towards my grandads care, I'm not disputing that and also it's not me who will receive a windfall, if any! The point was my nan (who correctly assumed) is under the illusion that she now has no access to her share of the money to pay towards HER costs of living as the money from the pep that was originally hers is now not hers to spend, however yes, my mum and uncles are now POA so I assume they can sign on his behalf which will help support my nan's bills etc?

Many thanks again.

margaretclare

dlcs wrote: »

Hi,

Thank you for your responses of which some have been very informative and others seem to have missed the point or not understood my question! Of course they should pay towards my grandads care, I'm not disputing that and also it's not me who will receive a windfall, if any! The point was my nan (who correctly assumed) is under the illusion that she now has no access to her share of the money to pay towards HER costs of living as the money from the pep that was originally hers is now not hers to spend, however yes, my mum and uncles are now POA so I assume they can sign on his behalf which will help support my nan's bills etc?

Many thanks again.

Hello

I think that traditionally, in your gran's generation, it was the practice to have savings in joint names. Times have moved on, and I agree that PEPs were only ever intended to be in one person's name. You say 'the money from the PEP that was originally hers' - well, it wasn't! Even if it was money that she'd originally saved in her own name, the moment she gave it to your Grandad to be put into his PEP, not 'his-and-hers', she lost control of it. It would have been different if it had been a joint savings account with both signatories, then she could have accessed it.

I agree with others, the way forward is for the POA to withdraw the money from the PEP and put it either into an account in your Gran's name alone, or in their joint account. (Although, a bit pointless having a joint account, if Grandad can never do banking for himself, better to have an account just for Gran).

They couldn't possibly have foreseen this scenario 20 years ago, but they should have been told that money in a PEP is not 'joint'.

I agree with Primrose. We should all have our savings in our own names.

HTH

Margaret

dunstonh

The point was my nan (who correctly assumed) is under the illusion that she now has no access to her share of the money to pay towards HER costs of living as the money from the pep that was originally hers is now not hers to spend,

That is an incorrect assumption.

however yes, my mum and uncles are now POA so I assume they can sign on his behalf which will help support my nan's bills etc?

Correct.

dlcs

Hi

Thank you margaret, things are becoming quite clear now! Thanks dunstonh, you are of course correct, it was an incorrect assumption!! I'm so grateful of all your advice help guys!

Dave