Care annuity

[GardenersDelight]

Hi following a stroke my mum was deemed to have lost capacity. So after 8 weeks in hospital she moved into a care home last week
Luckily my brother and I both have lasting power of attorney and are now looking into buying a care annuity and wondered if anyone has any experience of them
Thanks

I'm guessing peeved is perhaps not the right word. I'm anxious she may not have enough savings and also very sad that the money won't be spent on her enjoying herself in her own home. She's now too confused and paranoid to enjoy most things and is no longer able to care for herself which she was only 2 months ago!

I'll look into attendance allowance but know she won't get CHC money as its dementia rather than nursing care she needs

If your mum needs full time care because of dementia she will qualify for the full attendance allowance . Form is very long but not difficult .

I know a lot of people will disagree with this but I truly felt that the care home was better for my mum than being in her own home as there was so much going on in terms of different activities rather than just sitting watching her TV.

The attendance allowance forms can be done online or on paper. Get the paper version.

Partly because the online version is an absolute nightmare to fill in - very badly set up. But mainly because if you use the paper version payments will be backdated to the date you requested the form, whereas with the online version they only backdate to when you submit the form.

As for the money disappearing, you will be spending a big chunk of it either way. All annuities are an actuarial gamble, and the firms selling them have professional actuaries - so they are more likely to 'win' the financial bet of whether you pay them more for the annuities or they pay you more for the care.

However, the stakes on your side aren't just financial. There's also the value of certainty.

How do you balance the high probability of an annuity costing you a bit more but giving you guaranteed set payments for as long as needed, against the low probablilty of direct payments costing you a lot more, and the very low probability of running out and having to deal with unwanted care home moves for someone by then in their 90s?

Everyone has their own circumstances and risk tolerance, so you'll need to decide that for yourselves once you have a quote and a better idea of prognosis.

My elder sister and brother who had P of A took out one for our mother, who had dementia. It took a hefty chunk out of her savings and TBH I did wonder at the time whether it was going to be worth it - she was already almost 89 when she moved to the care home. She came from a large and generally long-lived family, but even so, none had lived into their 90s.

However, thank goodness they did it - she went on to shortly after her 97th birthday. (Which IMO does say something about the very good care she received.). My sister worked out that we had broken even at roughly the 4 year mark. The annuity covered the difference between her income and the fees until she died.

However, this was at a time when interest rates were rather lower than now.
The annuity company took some time to make the offer, having studied her medical history etc. and made a calculated bet on how long she was going to live.

High interest rates mean that annuities are relatively cheap at the moment.

That's interesting to know!
Have just phoned to request attendance allowance form, every little helps as they say!

We considered it for Mum but it would not have worked out in her favour. Basically it’s a lottery - you are betting your mum will outlive her equity, they are betting she won’t, and they have more data, are the ones doing the sums, and are keen to reduce their risk.

There is an awful moment when your parent goes into care when you realise all that equity is gradually going to be spent, but that’s what “saving up for old age” means.

Your mum has about 8 years’ money; either she will not use all that money up, or she will outlive her savings and we taxpayers will pick up the costs of her care.

I agree with PPs that they're only worth it if your loved one is in good physical health.
These companies do want to make money & want their clients to die asap so they can make a profit.
It is a gamble.

My IFA recommended one for my mother when she had dementia & went into a care home.
We had very good reason to be concerned that her liquid assets would run out especially if she ever needed nursing care as well dementia care.
We knew we would break even after 5 years. She didn't quite reach this but for me, it was worth every penny knowing that her money wasn't going to run out.

@Puddingpieplum I am not just shouting about CHC. I have been through it and done a huge amount of research regarding the CHC Framework. We went from 4 visits a day to 24/7 care because we fought hard and understood what my Mum's rights were. It was horrible and incredibly stressful but we were determined not to be put off.

Whilst only a small % get it, it does not mean that a much larger percentage of people are not entitled to it. It is simply that CHC makes it so difficult to get the funding. Many people don't even try in the first place or give up because they are trying to go through the process at the most stressful time.

Beacon is a really good source for people to use because they are funded by the NHS and were set up to help people understand whether it is worth going through the CHC process.

@BetterCare I'm not after a quarrel, but I work in CHC. OP's mum is not even in a nursing home, she is in a residential home, therefor she doesn't require input above district nursing. If she isn't even eligible for FNC then she's definitely not eligible for CHC. It would be ridiculous for OP to base the decision on financial planning on a loose idea of maybe getting CHC funding one day.

I understand that people want to raise awareness of CHC, but that needs to be measured against giving information about how complex a patient needs to be for eligibility.

It's not that CHC make it "so difficult" to get funding, we as practitioners have no agenda to reject people. There is a tool that is applied, and evidence has to be available to evidence people's needs, if it isn't there then the funding simply can't be agreed, it goes through several levels of scrutiny.

@Puddingpieplum I am not looking for an argument either. My advice was to speak to Beacon. They are incredibly helpful.

OP's Mum may not be eligible at this point but it does no harm to understand the CHC Framework so if her Mum sadly reaches a point where she becomes eligible they then can apply.