I don't understand the point in buying a home when all the fees go to care

[whatwhatinthebutt]

I hear 'you need to leave something to your children' but then what if it all goes on care?

You had a home that you had to maintain and repair, but you can't leave it to your children because you have to go into a care home.

It seems wrong or strange, because why are we told to do this if it's so likely it will all go before the children benefit from the hard work of the parent?

Care home fees seem to be something around 2 grand a week, so 10 grand a year. How long to people usually last in care homes? Is it oftentimes they die in there?

And how does it work? Say my dad goes into a home, they force me to sell the house to pay, I get a lump of cash, then just give that to the care home and I get what's left when he dies?

Most people on this thread haven’t been like that. However, there is some truth in the fact many older people do tend to vote Tory and did on the whole vote Brexit. I don’t see why it is horrible to point this out?

The same can be said about how people sometimes discuss the young and those on benefits etc people tend to make generalisations - although I get how it can be upsetting when people do that.

I helped my dad until at 90, after several hospital admissions and a couple of falls, he decided he was too vulnerable at home with carers twice a day and elected to go into care so he had support 24 hours a day.

We sold his house at his request and he died in May after two years in care, £6300 a month at the end. No nursing care just residential.

Have to say he was very happy there.

@endofthelinefinally I'm in this thread though discussing the OP...

It is basically a lottery though. If you get a ‘physical’ illness like cancer in your old age, your very expensive ‘medical’ care will be paid for even if it is only therapeutic/palliative. You will be able to leave an inheritance. If you are unlucky enough to develop dementia, your very basic day to day ‘care’ (jumper on inside out, hair unbrushed, left alone in your room because you were unable to express enthusiastic consent for the activity session) will cost you many thousands of times the amount you would have frugally but enjoyably spent on pleasing yourself before your illness and nothing will be left. So it is not surprising it seems unfair. It is.

I'm with you on this one. Yes it may be nice to leave something for my children but if selling my home when I come to the stage of needing care then so be it. I'd rather have a better quality of care at an older / unwell stage than have to rely on poorer care due to finances. I'm sure they would too as I'd be the same about my parents.

Direct comparison.

My DPs rent social housing and have no significant life savings. If they need to go in to care it will be one appointed by the local authority that can get the best deal.

On the flip side, DH and I own our own home and have business assets that will serve us well in retirement. If we need to go in to care, we'll be able to have the home of our choosing.

My DGPs went in to care homes provided for by the LA and my DH's DGPs went in to ones of his family's choosing as they much were better off and could afford the £2k a week home one of them ended up in.

The difference, IMHO, is very obvious.

I would much prefer to own my own home now, with the stability that that brings, and have a wider range of options available to me in my later years.

My DPs are at the mercy of their landlord and won't have as much say in care provision later, unless I step in and financially help out, which is difficult as I'm currently asset rich/cash poor.

As PP have said, it ultimately works out cheaper to buy a property. When we bought our house our mortgage was £1,200 a month and the rented property next door (same size) was £1,250 a month. Since then, our mortgage prices have remained the same (until our current deal runs out!), but in the meantime our house has increased in value by some £250,000. If I want to rent the house next door now, it would cost £2,500 a month.

Ultimately, I don't think it's wrong to have to pay for your own care home fees. Why, just because you've got old, should you not have to pay to live any more?

Sad to hear about your neighbour - my MIL has been in a (average priced, £1200pw) care home in Somerset for 12 months (with advanced dementia) and all these things are taken care of by the care home, with chiropodists etc visiting, accompanied hospital appointments etc taken care of.

She has always maintained that she doesn't eat anything there, but she definitely does!

Maybe your neighbour should challenge them to look after him better, or at least speak to other visitors to see whether they also have to do so much. It would be an upheaval to move her husband, but maybe the threat of it, would be beneficial, to get better care.

It's all a lottery as to whether you need a care home or not. Should add that the cheaper care homes were not very appealing, when we were looking around.

More security than renting - renting you're always at the whim of the landlord needing the house back. And you can't make the house how you would like both in terms of decor but also adapting the facilities. And you have to keep paying rent forever, whereas a mortgage is eventually paid off. Many people would struggle to pay rent in retirement when their pension is much lower than a salary whereas ideally a mortgage is paid off well before retirement.

And not everyone goes into a care home. Not even a majority of people go into one so it isn't a sure thing.

Plus if you have a house you own and do need to go into care you get choices both in terms of which home, where it is and when you go.

The OP has a point. We have a demographic timebomb that will explode - but in a slow and sustained way over the next few decades as the babyboomers pass.

The need for long term residential and medical care will rise exponentially at a time when we have a chronic shortage of people wanting to work in the profession and when our country becomes increasingly impoverished. Our attitude to foreigners/immigrants is being heeded by both of the main political parties so we will have to suck up the labour shortage.

Couple that with future generations where people have built up less equity to pay for their care or are long-term renters and the costs will have to disproportionately fall on those well off enough to own their own homes but not rich enough to have put them in offshore tax structures.

This and inheritance tax will mean no one with an estate of between 1million to about 3.5million will be able to gift the majority of it to their offspring. This will disproportionately affect home owners in the SE and London as frankly a flat can cost more than the lower amount cited.

If you’re anywhere from a young babyboomer to a late millennial with assets but not super rich, it is perhaps time to reassess where you’d be better off living. If anyone comes up with an answer let me know!

Why buy? Because then you have a choice about where you live. If you are renting you either have a rental that the council or housing association have chosen, or a rental that a landlord has chosen.

Also, if you are paying rent to a landlord you are very kindly buying their property for them. I would rather my hard earned money bought me somewhere I want to live

I mean there’s pros and cons isn’t there? If renting the landlord has to deal with maintenance and repairs (and pay for them). You can move areas much more easily, just give notice and find a new place. No expensive conveyancing. If your neighbour is a pot smoking ASBO king you can move without having to notify the next renter.

A lot of posters on here seem determined to convince people slogging away for little benefit that they’re actually better off (need to keep the workhorse working I suppose) but it simply isn’t really the case any more.

Having rented and now bought, the landlord's idea of keeping on top of maintenance and my idea are totally different! Yes, it met the legal requirements for gas/electrical safety but it wasn't well maintained and that meant we had really high utility bills. When there was a problem (water coming through ceiling!) we couldn't just ring a plumber ourselves and get them out asap, we had to contact the letting agent, wait for them to contact the landlord to get permission, sort out who would be in when to let the plumber in. They used the cheapest one they could so that meant shoddy work and then repeat visits - all of which we had to be present for to let them in.

Contrast with owning a house - the mortgage is several times lower than the rent. We chose high spec insulation and energy saving appliances so our bills are lower. Our house is well maintained. We can call a plumber out immediately and at our convenience should we need one.

Let's say someone moves out at 25 and has a 30 year mortgage. They pay roughly £1k per month for that entire period (obviously goes up and down with interest rates but not going to overcomplicate) to the age of 55. Alternative is the same person moves out at 25 and rents for £1k per month AT THE BEGINNING. Their rent goes up with inflation and they are paying rent for much longer than 30 years..... perhaps double this, paying for 60 years to the age of 85. All this with the constant fear of their landlord selling up and having to move out of their home. They can't always choose their bathrooms or kitchens or colour of their walls. And then when it comes to care homes they have to lump for the free option which is unlikely to be as good as the paid option. I really can't see any argument for renting IF you can buy

Can't be arsed to read all the thread, so apologies if this has been done...

1:7 of us will end up in care, so 6:7 will keep the money from their house.

I think that's good odds.

I own my own house and will be mortgage free before I'm 50. I pay around £300 a month, was around £500 when it started. My friends pay £700 to rent similar properties, next door is up for rent at £850.

From the age of 50 to whenever I may need a home, I will only be paying for utilities, so I will be able to have a much better quality of life and retire before 60.

Obviously there are positives to renting - I had to pay out 3k when my boiler broke, and I've paid to replace windows and things. But I've also been able to put in new kitchens, remodel the garden - basically do what I want when I want.

It's swings and roundabouts really. I suppose it's what works best for people. I do think renting should be easier and more secure if that's what you choose to do though.

My 63yo Dad has early onset dementia and will likely have to go into a care home in the next 12 months. Everything he has worked so hard for (including a beautiful house in Dorset) will disappear long before he does, but at least my sister and I will have the peace of mind knowing we can chose the best care for him, not just take the cheapest option which is what the state would put him in. That is worth it for me

That's my feeling too. I'm sorry to hear about the early onset. My dad has now been in a care home for 11 years, and I took the gamble of buying an annuity fairly early on (it paid off for us). Do please speak to a financial adviser if you haven't already!

But it also seems unfair that if you’re unfortunate to get ill in your old age - and dementia isn’t classed as an illness - your assets are taken away from you to fund your care, despite contributions to the NHS throughout your life through taxation and national insurance.

I’m aware that geriatric care is a huge burden on the NHS, but it just shows that the service isn’t free at source like we’ve all been brought up to believe. When you really need it, suddenly you have to pay. None of us can help getting old, it’s not a condition acquired through lifestyle choices and is sometimes just luck of the draw whether you’re going to require long term care.

I also cannot understand how care homes - as opposed to nursing homes - can justify their extortionate fees either. It’s not as though they have huge staffing costs, care workers are paid peanuts. An average home charging £1200 a week x 4 = £4800
£4800 x 12 = £57,600
£57,600 x say 20 residents = £1,152,000
Even after utilities, food and staffing costs, that’s still a nice little earner.

Successive governments have promised they will get a grip of social care and its implications, but never have. Maybe it’s time we considered some sort of insurance policy for those now under 35 to cover the costs of their potential future care requirements?

But they do have huge staffing costs, even paying minimum wage? They need carers, often two per person for things like bathing, covering 24/7. Somebody to manage the carers 24/7.
Laundry and cleaners.
Somebody to do the paperwork and liaise with GPs, social services, hospitals, families.
Cooks and catering staff to cover all meals 7 days per week.
Maintenance and handyman staff to keep everything working.
Admin, payroll staff behind the scenes.

And the heating costs must be extreme given how hot care homes always are.

Presumably also building costs - not sure if they're likely to own the building outright but I imagine there are mortgage/loan/building costs to cover too. And for older buildings much higher maintenance costs.

I do think care required for dementia/ Alzheimer's which can last for 5-10 years should be covered by the government at least in past, especially as euthanasia is currently illegal.

I think you've got a good point OP, and I've often thought it myself.

but most britons want to own. 60% of us own and they polled renters (social and private) and apparently as many as 90% of them want to own.

Even 6% mortgage interest rates and sky high renovation costs (most homes bought on a budget have lots of problems) don't seem to dissuade them.

so what i was trying to say is that Britons want to buy irregardless of care home costs. I suspect even if inheritance tax was much higher, they would still want to buy.

You need to look into care fees annuities.

Assuming the property to be sold is worth over the amount quoted the remaining capital will be untouched.