Suitable risk free investment to fund care home?

rwilts

Hi,

looking for a bit of support / advice please. My mother needs to go into a care home and this needs to be privately funded.

She will have capitol of @ £240,000 from sale of home and savings.

She will get some state support due to illness, she is left needing to find @£900 per calender month.

The desire is to place the whole capitol into one risk free investment ( savings account ) that will pay sufficient monthly interest that can be dawn and used to pay the fees. The capitol remains intact.

I thought this would be easy but having had two fruitless meetings with my mothers Bank i could do with some advice.

The financial adviser at said bank talked about splitting investment over several product ect.. but seemed unable to suggest one simple product that would give us what we need.

I am not financially naive, i personally have an Internet based savings account with my own bank that pays around 6%.

Any suggestions on where to look would be gratefully received.

jem16

rwilts wrote: »

Hi,

looking for a bit of support / advice please. My mother needs to go into a care home and this needs to be privately funded.

She will have capitol of @ £240,000 from sale of home and savings.

She will get some state support due to illness, she is left needing to find @£900 per calender month.

The desire is to place the whole capitol into one risk free investment ( savings account ) that will pay sufficient monthly interest that can be dawn and used to pay the fees. The capitol remains intact.

Savings accounts are not risk-free either. The capital may indeed remain intact but its value will diminish due to inflation especially as you are taking a monthly income to pay for care home. Eventually the monthly income will decrease in value too.

I thought this would be easy but having had two fruitless meetings with my mothers Bank i could do with some advice.

The financial adviser at said bank talked about splitting investment over several product ect.. but seemed unable to suggest one simple product that would give us what we need.

Stay away from the bank for investment advice.

You would be far better to see an Independent Financial Adviser who can look at the best way to invest this money to allow for a monthly income and enough growth to retain capital value.

There are also immediate needs annuities to provide for care home fees.
http://www.sharingpensions.co.uk/annuity_immediate_needs.htm

dunstonh

The financial adviser at said bank talked about splitting investment over several product ect.. but seemed unable to suggest one simple product that would give us what we need.

I am not financially naive, i personally have an Internet based savings account with my own bank that pays around 6%.

You saw an insurance agent at a bank but are not financially naive?

Two options really exist here as there is no real risk free option. Investments or immediate care annuity.

rwilts

Good points,

But thats why i didnt take anything they offered. You understand she has banked with them.......

Thanks for the pointers

Biggles

I would recommend you consider an immediate care needs annuity.

The cost of this will depend on your mother's age and health, and can provide a sum such as £900 per month for a fixed, one-off fee, leaving the rest of her funds invested.

Take a look at www.nhfa.co.uk, who are one of the few specialists in this field.

jamesd

rwilts, immediate care needs annuity plus investing the remainder seems reasonable. The annuity provides the certainty that the bills will be paid and leaves the investing free to be a bit more variable in its returns.

You wouldn't want to put the money all into a savings account because 6% only delivers about 1% after inflation and that's only 200 a month. Easy enough to do better than that with a range of investments. IFA time.

jem16

rwilts wrote: »

You understand she has banked with them.......

Banks are good for savings. However you really need more than this and the bank is not the place to go.