Immediate needs annuity question
Comments
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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. thanks0 -
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
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.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
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.0
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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?0
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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?0 -
Her care costs are £20,280K per anum (after income).
Sounds painful.....:eek:
https://www.care-fees-annuity.co.uk/care-fees/pros-cons-of-care-fee-annuities/0 -
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?
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.0 -
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).
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.0 -
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).your only concern will be MILs well-being, the well-being of the possible beneficiaries is totally immaterial
I had assumed investments (which I've always been told are for 5 years+) were out of the question.assuming investing some of the money provides sufficient inflation protection
It's going to market shortly (just waiting for a carpet fitter).As a thought, perhaps you could sell the flat
The local authority will insist it's sold as currently they are paying for her.0 -
In what scenarios do immediate needs annuities makes sense?
Guarantee of payment for life. its the secure option.
However, statistically, the odds are that it will be the option that is least likely to be the most cost effective. Problem is that you don't know the date of death. So, its a gamble at worst or a judgement call at best. Will she be like the average and pass away within 2 years (where an annuity would be poor value in hindsight) or will she go on for years (where the annuity will be better value).I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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