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  • FIRST POST
    • gibbo9
    • By gibbo9 12th Sep 18, 10:45 AM
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    gibbo9
    Immediate needs annuity question
    • #1
    • 12th Sep 18, 10:45 AM
    Immediate needs annuity question 12th Sep 18 at 10:45 AM
    Hi,I realise this may not be the right place but I know people on here have helped on this subject.
    From what I read the are 2 providers of these, but who are they?
    Most people seem to recommend advisors associated with SOLLA.
    Any local to us are restricted not independent and all seem to be part of st jame's place. SJP website lists Friends Life and Just as their providers of immediate needs annuities.
    Are these the 2 people mention?
    Hope someone can lighten the darkness for me as I need to start my enquiries soon
    Many thanks in anticipation
    Ray
Page 1
    • dunstonh
    • By dunstonh 12th Sep 18, 11:07 AM
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    dunstonh
    • #2
    • 12th Sep 18, 11:07 AM
    • #2
    • 12th Sep 18, 11:07 AM
    Any local to us are restricted not independent and all seem to be part of st jame's place. SJP website lists Friends Life and Just as their providers of immediate needs annuities.
    Which search engine are you using? If unbiased, the deselect the option that only shows paying firms. Or better still, use a different search engine as most IFAs I know have stopped using unbiased.

    You should have IFAs relatively local unless you are extremely remote. The issue could be that many IFAs just dont advertise and pay to go on listings as they dont need to. So, using the free listings or semi-free like Adviser book ( https://adviserbook.co.uk/ ) or the professional body PFS may be a better solution https://www.thepfs.org/yourmoney/find-an-adviser/
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • gibbo9
    • By gibbo9 12th Sep 18, 11:15 AM
    • 44 Posts
    • 56 Thanks
    gibbo9
    • #3
    • 12th Sep 18, 11:15 AM
    • #3
    • 12th Sep 18, 11:15 AM
    Thanks for the quick response. I was using the search facility in the SOLLA website as quite a few people recommend using advisors registered/linked with them. I'll see what your suggestions give me. Do you know who the providers are as a matter of interest?
    • xylophone
    • By xylophone 12th Sep 18, 11:30 AM
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    xylophone
    • #4
    • 12th Sep 18, 11:30 AM
    • #4
    • 12th Sep 18, 11:30 AM
    Friends Life now Aviva.

    http://www.aviva-for-advisers.co.uk/adviser/site/public/products/retirement-solutions/lifetime-care/immediate-lifetime-care


    https://www.justadviser.com/products/care-funding/what-is-an-immediate-or-deferred-care-plan/

    You might try Adviserbook - type in location then see filter on left hand side - you would need to tick the "long term care" box and "confirmed independent"?

    https://adviserbook.co.uk/
    • gibbo9
    • By gibbo9 12th Sep 18, 11:39 AM
    • 44 Posts
    • 56 Thanks
    gibbo9
    • #5
    • 12th Sep 18, 11:39 AM
    • #5
    • 12th Sep 18, 11:39 AM
    Thanks xylophone.
    Those are the 2 mentioned on SJP website, so are they the only 2 providers in the market?. If that's the case would it really matter if the advisor was not independent as there would be no other place to get quotes from and we are not really looking at any other product
    • gibbo9
    • By gibbo9 12th Sep 18, 11:43 AM
    • 44 Posts
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    gibbo9
    • #6
    • 12th Sep 18, 11:43 AM
    • #6
    • 12th Sep 18, 11:43 AM
    Ticking long term and confirmed independent gives a result of 0 for our area
    • dunstonh
    • By dunstonh 12th Sep 18, 12:32 PM
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    dunstonh
    • #7
    • 12th Sep 18, 12:32 PM
    • #7
    • 12th Sep 18, 12:32 PM
    untick independent and see what you get. Adviserbook is a relatively new directory and most have not verified their independent status yet. At least it may show other options
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Malthusian
    • By Malthusian 12th Sep 18, 2:21 PM
    • 7,369 Posts
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    Malthusian
    • #8
    • 12th Sep 18, 2:21 PM
    • #8
    • 12th Sep 18, 2:21 PM
    If that's the case would it really matter if the advisor was not independent as there would be no other place to get quotes from and we are not really looking at any other product
    Originally posted by gibbo9
    Possibly not, but I would be concerned about

    a) SJP charging a much higher fee on the annuity than an IFA would

    b) even though you may currently only be interested in immediate care annuities, SJP might try to persuade you to buy a much more expensive solution.

    If you genuinely can't find a local IFA then a local restricted adviser (not SJP, or any of the other national stack-em-and-squeeze-em consolidator outfits) is the next best option. But as dunstonh said, you must live somewhere very remote if you really don't have any IFAs within reasonable driving distance.

    Friends Life and Just are indeed the only providers at present.
    • xylophone
    • By xylophone 12th Sep 18, 2:32 PM
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    xylophone
    • #9
    • 12th Sep 18, 2:32 PM
    • #9
    • 12th Sep 18, 2:32 PM
    Have you tried outside your immediate area - the nearest city?

    https://ukcareguide.co.uk/immediate-care-annuity/

    You might try here.
    • gibbo9
    • By gibbo9 12th Sep 18, 3:29 PM
    • 44 Posts
    • 56 Thanks
    gibbo9
    Thanks for the replies. We live in Newcastle/stoke area, so not remote. Any of the local/SOLLA ones seem to be SJP related, so perhaps we do need to cast a wider net or go for someone not registered with SOLLA. Will different firms charge different fees for the same product. I suspect that's a silly question possibly
    • Shedman
    • By Shedman 12th Sep 18, 4:23 PM
    • 344 Posts
    • 233 Thanks
    Shedman
    We used Eldercare remotely (ie over telephone) - they are SOLLA registered. Found them very helpful and the process for getting quotes was straightforward and pretty quick.

    Their basis of charging is that you either pay an amount for a full report (which gives a number of different quote options such as level, indexed, deferred) and a lesser % based on premium if you proceed or you get the report for free but pay a higher commission.

    You don't need to progress if you don't want once you have the report, so you could get the quotes for free with no upfront commission. Other more local advisors wanted to charge a large fee before getting quotes. (In fact Eldercare will also give you a ring and give headline quotes before issuing report so that you dont even necessarily need to get full report if those headline quotes are way over expectations).

    For premiums of 70,000 or more first option works out cheaper overall assuming you do actually progress.

    As indicated there are only 2 providers (Aviva and Just) but apparently a third provider is soon about to enter this market (how soon wasn't indicated).

    As an indicator, if it helps, the premium for level (non indexed) payment for an 86 year old woman with some health issues (but nothing life threatening) was around 5.6 x the annual payout (ie needs to live until around 92 before break even). However main part of our reasoning for an annuity was to have the certainty that money wouldn't run out how ever long she lives so we are comfortable with the risk of possibly losing out if she dies early.

    PS PM me if you want some further info on the process we went through or if you've got more queries as I know it's a difficult decision.
    Last edited by Shedman; 12-09-2018 at 4:32 PM.
    • gibbo9
    • By gibbo9 14th Sep 18, 11:25 AM
    • 44 Posts
    • 56 Thanks
    gibbo9
    Still looking through the links you've all provided. Thanks for those.
    What is a "whole of market-restricted financial adviser" Someone who looks at only certain products but across the whole market. Tried using their online chat which was most unhelpful so won't be persuing that one but would just like to clarify what it means if I come across it again. thanks
    • dunstonh
    • By dunstonh 14th Sep 18, 11:33 AM
    • 98,579 Posts
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    dunstonh
    Still looking through the links you've all provided. Thanks for those.
    What is a "whole of market-restricted financial adviser" Someone who looks at only certain products but across the whole market. Tried using their online chat which was most unhelpful so won't be persuing that one but would just like to clarify what it means if I come across it again. thanks
    Originally posted by gibbo9
    Whole of market restricted is not an official classification. However, it is one that is quite common. It means that they restrict in certain areas but are whole of market in the areas they advise on. Tends to be used by firms who dont want to deal with high-risk transactions. Most commonly they will not transact in unregulated products, ETFs, Investment Trusts, VCTs, EISs etc. Their terms of business must state what their restrictions are if they use the term whole of market.

    Its a lot better than SJP but not as good as an IFA. For Mr & Mrs Average, probably not an issue as long as the restrictions are not heavy. Firms that have gone down this route have tend to have mission creep the longer they are restricted. Initially its the very high risk niche stuff they dont do (which I think is fine for most people). Then it becomes an investment panel, then preferred providers and so on.
    Last edited by dunstonh; 14-09-2018 at 12:50 PM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • fred246
    • By fred246 14th Sep 18, 11:54 AM
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    fred246
    I was in a similar position and was recommended to use SOLLA from this forum. I ended up with a SJP adviser who thankfully I managed to get rid of without too much hassle and I did get some useful information for free. He seemed to dismiss the annuity as too expensive but seemed to be interested in investments. An annuity is a bet on how long your loved ones will live. As usual with insurance products the insurer usually wins. The odds are that you will win if you don't buy one. On average people don't live too long in care. Our adviser said an annuity would cost 7 years of care. My relative died after one.
    • fred246
    • By fred246 14th Sep 18, 12:00 PM
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    fred246
    I remember looking at the SOLLA website looking for funding sources for SOLLA. It wasn't obvious how it's funded. After getting an SJP adviser I was suspicious that SJP might give SOLLA educational grants or similar. I have no evidence for that.though. Does anyone know how SOLLA is funded?
    • lisyloo
    • By lisyloo 14th Sep 18, 12:22 PM
    • 25,760 Posts
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    lisyloo
    In what scenarios do immediate needs annuities makes sense?


    My MIL is 91 and apart from chronic conditions is in good health.
    Her arthritis wont kill her.
    He dimensia might but slowly.
    I have applied to the court to be her deputy, she has about 10K savings and a flat worth 170k.
    Her care costs are 20,280K per anum (after income).


    I think it could be in her interest because if she lives a long time it means she can stay in the same home (rather than LA moving here somewhere horrible).



    One beneficiary could benefit from protecting their inheritance, the other beneficiary doesn't need it, but my duty is to her.


    I appreciate it's subjective but are there any thoughts on when it's appropriate?
    • xylophone
    • By xylophone 14th Sep 18, 12:39 PM
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    xylophone
    Her care costs are 20,280K per anum (after income).
    Sounds painful.....

    https://www.care-fees-annuity.co.uk/care-fees/pros-cons-of-care-fee-annuities/
    • Linton
    • By Linton 14th Sep 18, 12:47 PM
    • 11,743 Posts
    • 12,206 Thanks
    Linton
    In what scenarios do immediate needs annuities makes sense?


    My MIL is 91 and apart from chronic conditions is in good health.
    Her arthritis wont kill her.
    He dimensia might but slowly.
    I have applied to the court to be her deputy, she has about 10K savings and a flat worth 170k.
    Her care costs are 20,280K per anum (after income).


    I think it could be in her interest because if she lives a long time it means she can stay in the same home (rather than LA moving here somewhere horrible).



    One beneficiary could benefit from protecting their inheritance, the other beneficiary doesn't need it, but my duty is to her.


    I appreciate it's subjective but are there any thoughts on when it's appropriate?
    Originally posted by lisyloo

    I think its very difficult to say until you have some idea of the cost of the care annuity. When you have PoA/deputyship your only concern will be MILs well-being, the well-being of the possible beneficiaries is totally immaterial. I would would agree that the only thing that matters is that she is not forced to leave her current home because she has run out of money, with a proviso that you dont spend her money foolishly. In this case selling the 170K flat would keep her going for a maximum of 8 years assuming investing some of the money provides sufficient inflation protection. This should be more than enough but not with 100% certainty.


    As a thought, perhaps you could sell the flat and use the money to pay her care home costs for the next say 3 years. If necessary you could then reconsider a care annuity. There must be some optimum point at which buying an annuity becomes the cheapest option that ensures she never runs out of money. Determining this point is hopefully what a qualified IFA should be able to help you do.
    • fred246
    • By fred246 14th Sep 18, 12:50 PM
    • 1,977 Posts
    • 1,297 Thanks
    fred246
    My MIL is 91 and apart from chronic conditions is in good health.
    Her arthritis wont kill her.
    He dimensia might but slowly.
    I have applied to the court to be her deputy, she has about 10K savings and a flat worth 170k.
    Her care costs are 20,280K per anum (after income).
    Originally posted by lisyloo
    The problem is that no-one can tell you exactly how long she will live for. The financial people will play on that uncertainty and they could benefit nicely. If your MIL is deemed to need a home she is in trouble. She has lived way over normal life expectancy. Someone told me that at 94 you had a 50% chance of living the year. Get her in a home full of bacteria. Keep her immobile by doing everything for her and she won't live long. Immobility is a massive killer. Greatly underestimated. So sell the house. Put the money in high interest accounts and wait. Fantastic advice from an anymous person on the internet.
    • lisyloo
    • By lisyloo 14th Sep 18, 12:54 PM
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    lisyloo
    your only concern will be MILs well-being, the well-being of the possible beneficiaries is totally immaterial
    Technically maybe, but in practice my relationship to my SIL and husband are of course very important to me. Fortunately we are all usually of the same mind and most financial decisions in her case are uncontencious (the flat HAS to be sold).


    assuming investing some of the money provides sufficient inflation protection
    I had assumed investments (which I've always been told are for 5 years+) were out of the question.


    As a thought, perhaps you could sell the flat
    It's going to market shortly (just waiting for a carpet fitter).
    The local authority will insist it's sold as currently they are paying for her.
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