Immediate needs annuity question

Shedman wrote: »

However, the elderly relative is often keen to ensure something is left for beneficiaries to inherit and hence both aims are legitimate to be considered if that is what the person has a desire to achieve.

Not if you have Power of Attorney.

Exactly how the law that the attorney must consider the donor's needs only should be interpreted is open to debate. (I don't believe that it makes purchasing an INA mandatory.) The law itself however is clear.

If POA is involved then the decision to buy or not to buy an annuity has to be justified entirely in terms of the donor's own needs, without the word "inheritance" appearing.

Rodders2409 wrote: »

Hello,

We're looking at Annuities again and wondered if anyone had a view on 3.5% as a fee / commission?

How much is it in pounds and pence?

From the percentage alone it sounds high, but it could be reasonable depending on the premium.

You would probably get more useful information ringing up a rival IFA and asking what they would charge for advice on an immediate needs annuity of the same size.

Bear in mind that the most likely outcome of buying a care annuity is the loss of tens of thousands of pounds, assuming the usual-sized premium. (That's how insurance works; a minority will gain tens or hundreds of thousands and not have to worry about going into Overmydeadbody Grove after their assets are exhausted.) The cost of advice is not really here nor there next to the expected loss. Especially as it's effectively mandatory. This is not a reason not to do it, it's just what has to be considered.

You mentioned in your previous thread that your MIL can afford her current care home for 6 years. Have you had underwritten quotes that indicate a care annuity would be affordable? Is there a risk that she might require a higher level of care in the future with increased fees?