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Elderly parents

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Original poster

Care home annuity

21 replies

Peoniesandcats · 30/05/2022 08:35

Am currently in the process of getting quotes for care home annuity insurance plans to cover care home costs for my mum in her early 80s with dementia.

I’m wondering if anyone else has gone down this route and what your experience is with it?

Once mum’s house is sold she’ll have enough to fund her care at least 10 years.

OP posts:

BookWorm45 · 30/05/2022 10:56

Just wondering what the benefit of an annuity would be - as I assume you'd get a limited amount each year - when could you also consider putting the proceeds of the house partially into some good savings accounts and drawing down what you need each year ?

Mosaic123 · 30/05/2022 11:28

I think the benefit of an annuity is that it pays out an amount (fixed or adjusted for inflation - whatever you sign up for) until the person passes away.

My MIL has been in a care home for over 8 years which is far over the average time.

Original poster

Peoniesandcats · 30/05/2022 18:46

Haven’t got the quotes back yet but it seems like a good way of paying for the care home fees and ensuring she stays in the one we’ve chosen, then putting the rest of money into savings accounts.

The risk is if mum doesn’t live for over x amount of years and the insurance company keeps the money. However all of the house sale is for her care anyway, it just feels like less of a worry with an annuity.

Even though she has dementia she is still mobile and physically healthy so I think will be similar to your MIL @Mosaic123

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BookWorm45 · 30/05/2022 18:59

Ah I think I misunderstood your question Peonies

If you're thinking of taking out an annuity but there will also be some money left over which is for savings accounts -then it sounds very sensible.

funkysheep · 30/05/2022 19:06

My great aunt had one (and also lived rather longer than expected). She viewed it as (very expensive) insurance. However it guaranteed that she could stay in the care home of her choice; it was definitely a good option for her.

pagansophie · 30/05/2022 19:20

We sold my dad's house and bought a care home fees annuity. It was worth it for the peace of mind that he could stay in that care home and there would always be money to pay for it. Make sure you take out one that has the 5% rise in payments every year. I worked out that the break even point was 3 years. Sadly he didn't quite make the 3 years, so they did make some money out of us, but at least he didn't spend that time worrying that he would run out of money.

MereDintofPandiculation · 31/05/2022 08:58

Friend got one for his DF, who then died after 8 months.

Original poster

Peoniesandcats · 17/06/2022 17:13

Thanks for your messages all.

I have more information now and overall mum needs to survive 5.5 years to receive a return.

We looked at the 5% rise in payments cover but Mum is better off using her savings/capital to cover that as the company want nearly £80k more for that option.

Once the house is sold we are going to go for the deferred planned in case of anything happening to mum in the early months.

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ancientgran · 17/06/2022 17:16

Speak to an IFA, we looked at this but then invested the proceeds from the house and 5 years later fees all paid and original money intact.

Original poster

Peoniesandcats · 17/06/2022 22:46

ancientgran · 17/06/2022 17:16

Speak to an IFA, we looked at this but then invested the proceeds from the house and 5 years later fees all paid and original money intact.

Will do. Did you use someone who was part of the Society of Later Life advisors? Have only just discovered them now.

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ancientgran · 17/06/2022 22:51

Peoniesandcats · 17/06/2022 22:46

Will do. Did you use someone who was part of the Society of Later Life advisors? Have only just discovered them now.

Show quote history

I'm not sure but he does look after alot of retired people and I know she isn't the only one in a home. It was all carefully planned with using ISAs, money in short term easy access, other in longer term investments. It has worked well for 5 years. Don't know if it is right for everyone but worth exploring. Good luck.

dane8 · 17/06/2022 22:54

This reply has been deleted

This has been deleted by MNHQ for breaking our Talk Guidelines.

Alphabet1spaghetti2 · 17/06/2022 23:02

@dane8 yes this is can happen in the uk. We looked at them, but opted to go with a IFA and ended up making more on the investments than we paid out in care home fees. But MIL only survived 3 years in care (96 years old). Our IFA also spread the money over lots of different investment to allow long, medium and short access.

gunnersgold · 25/06/2022 12:14

Did you decide on having one ? I'm in the same position . If I liquidate mums assets she would have around £1m .. to me if it's £300k then it's well worth it as I know she will be looked after and some of her assets will be left to grandchildren as per her wishes .. I don't care if we lose money as for me it's peace of mind . Historically the women in her family live alone life but need dentist care so I think it would work out for us .

Any advice is gratefully received

Original poster

Peoniesandcats · 25/06/2022 16:59

Yes have decided on getting one but can’t buy it until mum’s house is sold. It’s definitely worth getting some quotes.

Ive contacted a local Financial Advisor who has offered to get some quotes for care home annuities too as he thinks he can save us money so will see what they come back with.

He said I might as well shop around as can’t actually buy one yet which is true!

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gunnersgold · 26/06/2022 13:37

Thank you @Peoniesandcats ..

gunnersgold · 09/07/2022 21:32

@Peoniesandcats have you had any quotes ? Wonder if you could share the average costs you are looking at! ? Thanks

Original poster

Peoniesandcats · 10/07/2022 14:22

@gunnersgold I haven’t had any additional quotes but the initial ones were £250k-£450k depending on if I wanted deferred payments or to cover the increased annual interest…

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Auslaenderin · 10/07/2022 14:32

I would talk to an independent financial advisor and Age UK before making a decision. I have relatives in care homes, have discussed funding with many other families in my situation and nobody has suggested an annuity as the best route. Not saying that it is not in your case, but there may be better options.

The average stay in a care home is about 2-3 years. That said I have had one relative who died within a week of going into care and another who is still going strong 10 years down the line. I no longer worry about him being moved by the LA on financial grounds once his funds have run out. There are a few LA funded residents in his home and I am sure they would keep him there - not least because he has been paying twice what the LA pay and thus effectively funding one of their residents for the duration.

Is the facility you are looking at very expensive and 100% private? If not you should be OK. Also bear in mind that there is no guarantee that the home will keep your relative if their health situation changes. Some homes will just say they can no longer meet a residents needs and you have to find somewhere else anyway.

gunnersgold · 10/07/2022 15:05

Thank you

FinallyHere · 10/07/2022 16:28

Do the annuities guarantee to cover the care home costs or do they just offer an amount and potential rate of increase ?

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