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You might want to read this -john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
https://www.nhs.uk/conditions/social-care-and-support-guide/help-from-social-services-and-charities/financial-assessment-means-test/The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
There are exceptions where spouse or partner are still in there. Local council excluded the family house from my old dears assessment because I owned half (inherited from my old man).pblakeney said:
You might want to read this -john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
https://www.nhs.uk/conditions/social-care-and-support-guide/help-from-social-services-and-charities/financial-assessment-means-test/"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Nope. You are required to sell it and give all but the last £23K to the local authority to fund your residential care. Many people don't realise this, or think it's all free, but it's not. What's more, the effective rate at which assets are taxed is such that people try to avoid it. A much lower rate that applies to everyone would raise more, be fairer and reduce the urge to avoid it.john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
May's 100k is looking pretty generous if you have to leave your house.rjsterry said:
Nope. You are required to sell it and give all but the last £23K to the local authority to fund your residential care. Many people don't realise this, or think it's all free, but it's not. What's more, the effective rate at which assets are taxed is such that people try to avoid it. A much lower rate that applies to everyone would raise more, be fairer and reduce the urge to avoid it.john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
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Well quite.john80 said:
May's 100k is looking pretty generous if you have to leave your house.rjsterry said:
Nope. You are required to sell it and give all but the last £23K to the local authority to fund your residential care. Many people don't realise this, or think it's all free, but it's not. What's more, the effective rate at which assets are taxed is such that people try to avoid it. A much lower rate that applies to everyone would raise more, be fairer and reduce the urge to avoid it.john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
You are wrong. You aren't forced to sell the property and give all bar £23k to the Local Authority. The LA has to disregard the property for the first 12 weeks in its assessment. Assuming other assets over the £23k, or after the 12 weeks, you become a self funder and have to work out the best way to pay for your care in the private sector, and only pay for as long as you need it. Ongoing nursing care is state funded, but the 'hotel' costs aren't.rjsterry said:
Nope. You are required to sell it and give all but the last £23K to the local authority to fund your residential care. Many people don't realise this, or think it's all free, but it's not. What's more, the effective rate at which assets are taxed is such that people try to avoid it. A much lower rate that applies to everyone would raise more, be fairer and reduce the urge to avoid it.john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
It is an area where advice on the funding options needs to be taken. The property could be rented out instead of sold for example. It doesn't have to mean the whole estate is used up paying for care if the funding advice is heeded, but if you just drawdown on the sale proceeds from the property or other assets, then living too long could mean very little left. Alternative you use a care needs annuity, sacrificing some of the estate to preserve the majority.
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In my particular experience, renting the property would cover 16% of the care costs. I suspect similar applies for large swathes of notLondon. An annuity would similarly have to be extraordinarily generous to cover the care costs. So, not that I disagree with any of your points, but they aren't available for everyone. And bottom line is if you are a self funder you have to contribute one way or another.Dorset_Boy said:
You are wrong. You aren't forced to sell the property and give all bar £23k to the Local Authority. The LA has to disregard the property for the first 12 weeks in its assessment. Assuming other assets over the £23k, or after the 12 weeks, you become a self funder and have to work out the best way to pay for your care in the private sector, and only pay for as long as you need it. Ongoing nursing care is state funded, but the 'hotel' costs aren't.rjsterry said:
Nope. You are required to sell it and give all but the last £23K to the local authority to fund your residential care. Many people don't realise this, or think it's all free, but it's not. What's more, the effective rate at which assets are taxed is such that people try to avoid it. A much lower rate that applies to everyone would raise more, be fairer and reduce the urge to avoid it.john80 said:
I believe you main asset in your house is excluded from this is it not.rjsterry said:Social care is means tested and recipients have to contribute where they have the income or assets to do so.
It is an area where advice on the funding options needs to be taken. The property could be rented out instead of sold for example. It doesn't have to mean the whole estate is used up paying for care if the funding advice is heeded, but if you just drawdown on the sale proceeds from the property or other assets, then living too long could mean very little left. Alternative you use a care needs annuity, sacrificing some of the estate to preserve the majority.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
It was important to point out that you were very wrong in stating how self funders pay for their care.
Also key is to go and see a qualified financial adviser in long term care funding if ever involved in the process.0 -
£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
What's the catch? There has to be one at those rates.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
You can fool some of the people all of the time. Concentrate on those people.0 -
They're fully medically underwritten, and so based closer to individual life expectancy, plus consider the age that someone in care typically is.Longshot said:
What's the catch? There has to be one at those rates.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
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And you wouldn't get such a rate because you wouldn't be needing care, and won't be the relevant age - the clue is in the name of the product, as I pointed out.pblakeney said:£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂
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Granted I have oversimplified although having been through the process at short notice, opportunities for financial advice are not exactly thrust at you. You seem to know more than me about care annuities, but the pay out you've suggested is still only about half of what residential care costs in my experience.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
It was important to point out that you were very wrong in stating how self funders pay for their care.
Also key is to go and see a qualified financial adviser in long term care funding if ever involved in the process.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Poncified gambling. I’m gambling that I’ll live longer, they’re gambling I’ll peg it sooner. Be as well selling the house and using draw down. Amounts to about the same. And the circle is complete... 😉Dorset_Boy said:
And you wouldn't get such a rate because you wouldn't be needing care, and won't be the relevant age - the clue is in the name of the product, as I pointed out.pblakeney said:£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
The catch is you die.Longshot said:
What's the catch? There has to be one at those rates.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
"The statistics show that the average length of stay in a single residential care home in England that ended in a service users’ death was around 26 months, although this statistic does not include any previous stays in other homes."
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-09-05/8937
Seems like a pretty good investment on the lender's part0 -
Except that residential care costs are much higher than £20-25k per year.haydenm said:
The catch is you die.Longshot said:
What's the catch? There has to be one at those rates.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
"The statistics show that the average length of stay in a single residential care home in England that ended in a service users’ death was around 26 months, although this statistic does not include any previous stays in other homes."
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-09-05/8937
Seems like a pretty good investment on the lender's part1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
It's a hedge like buying insurance. The opposite of a gamble.pblakeney said:
Poncified gambling. I’m gambling that I’ll live longer, they’re gambling I’ll peg it sooner. Be as well selling the house and using draw down. Amounts to about the same. And the circle is complete... 😉Dorset_Boy said:
And you wouldn't get such a rate because you wouldn't be needing care, and won't be the relevant age - the clue is in the name of the product, as I pointed out.pblakeney said:£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂
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Residential home costs are typically in the £36-55k pa region. Remember that all bills etc are included in the fees so the resident probably only needs £100 pw extra for other items. Then deduct State Pension and other pensions. If the shortfall is then say £30k pa buy a care needs annuity for that amount. I just used £100k purchase price as an example to demonstrate the return.rjsterry said:
Except that residential care costs are much higher than £20-25k per year.haydenm said:
The catch is you die.Longshot said:
What's the catch? There has to be one at those rates.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
"The statistics show that the average length of stay in a single residential care home in England that ended in a service users’ death was around 26 months, although this statistic does not include any previous stays in other homes."
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-09-05/8937
Seems like a pretty good investment on the lender's part
If it was a property in the SE being sold then you'd still be left with a sizeable sum.
Also, the length of time in residential homes is around 9 years, in a nursing home it is around 18 months I think, hence the 26 month average figure quoted above.
Of course you could just put the cash in the bank and draw down on it, but there's no certainty or peace of mind that it won't run out. Then what?0 -
Not if you view insurance as a gamble.TheBigBean said:
It's a hedge like buying insurance. The opposite of a gamble.pblakeney said:
Poncified gambling. I’m gambling that I’ll live longer, they’re gambling I’ll peg it sooner. Be as well selling the house and using draw down. Amounts to about the same. And the circle is complete... 😉Dorset_Boy said:
And you wouldn't get such a rate because you wouldn't be needing care, and won't be the relevant age - the clue is in the name of the product, as I pointed out.pblakeney said:£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂
I gamble it may happen, they gamble it won’t. The odds are reflected in the premium.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Undoubtedly it works in some situations, but far from all. There'll be plenty of people with assets above the threshold, but not enough to buy the annuity they need. Whatever means of funding the care is used, the original point was that the value of the home is not exempted when assessing whether someone must self-fund.Dorset_Boy said:
Residential home costs are typically in the £36-55k pa region. Remember that all bills etc are included in the fees so the resident probably only needs £100 pw extra for other items. Then deduct State Pension and other pensions. If the shortfall is then say £30k pa buy a care needs annuity for that amount. I just used £100k purchase price as an example to demonstrate the return.rjsterry said:
Except that residential care costs are much higher than £20-25k per year.haydenm said:
The catch is you die.Longshot said:
What's the catch? There has to be one at those rates.Dorset_Boy said:Don't compare a care needs annuity with a pension annuity. The rates are massively different. £100k purchase price would typically provide £20-25k pa increasing at 5% pa.
"The statistics show that the average length of stay in a single residential care home in England that ended in a service users’ death was around 26 months, although this statistic does not include any previous stays in other homes."
https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-09-05/8937
Seems like a pretty good investment on the lender's part
If it was a property in the SE being sold then you'd still be left with a sizeable sum.
Also, the length of time in residential homes is around 9 years, in a nursing home it is around 18 months I think, hence the 26 month average figure quoted above.
Of course you could just put the cash in the bank and draw down on it, but there's no certainty or peace of mind that it won't run out. Then what?1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Not sure you know what a hedge is, mate.pblakeney said:
Not if you view insurance as a gamble.TheBigBean said:
It's a hedge like buying insurance. The opposite of a gamble.pblakeney said:
Poncified gambling. I’m gambling that I’ll live longer, they’re gambling I’ll peg it sooner. Be as well selling the house and using draw down. Amounts to about the same. And the circle is complete... 😉Dorset_Boy said:
And you wouldn't get such a rate because you wouldn't be needing care, and won't be the relevant age - the clue is in the name of the product, as I pointed out.pblakeney said:£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂
I gamble it may happen, they gamble it won’t. The odds are reflected in the premium.0 -
Eggs not all in one basket. But eggs are eggs. Assumptions are made and risks assessed.rick_chasey said:
Not sure you know what a hedge is, mate.pblakeney said:
Not if you view insurance as a gamble.TheBigBean said:
It's a hedge like buying insurance. The opposite of a gamble.pblakeney said:
Poncified gambling. I’m gambling that I’ll live longer, they’re gambling I’ll peg it sooner. Be as well selling the house and using draw down. Amounts to about the same. And the circle is complete... 😉Dorset_Boy said:
And you wouldn't get such a rate because you wouldn't be needing care, and won't be the relevant age - the clue is in the name of the product, as I pointed out.pblakeney said:£100k provides up to £25k PA? You’d break even in 4 years. Must get on this. I plan on living for another 40 years. 😂😂😂
I gamble it may happen, they gamble it won’t. The odds are reflected in the premium.
Much like bookies. They allow hedge betting.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
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I think he just showed why you were right in your assessment above.rick_chasey said:What?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
I suspect the argument is that everything is a gamble e.g. I gambled by not buying a lottery ticket. The problem with it is if everything is a gamble the word ceases to have any meaning. Therefore, it seemed like something not worth exploring much further.rick_chasey said:What?
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Kind of.
In an annuity you are hoping you will live longer than expected while the issuer is hoping you don’t. Both are gambling that they will be correct.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
In this case, you are buying nursing care for the rest of your life for a fixed price. No gamble, no need to worry about how long you live. A bit like if you buy a can of coke, you pay a fixed price. Another system might be where you pay double or nothing on a coin toss, but most people would see that as gambling - your argument is that by paying a fixed price you are gambling that you won't win the coin toss, and in my view it renders the word a bit meaningless.pblakeney said:Kind of.
In an annuity you are hoping you will live longer than expected while the issuer is hoping you don’t. Both are gambling that they will be correct.0 -
This. I understand the desire to cost the annuity provider money by living for another 50 years but, ultimately, TBB's statement is accurate.TheBigBean said:In this case, you are buying nursing care for the rest of your life for a fixed price.
If you have time I guess you could shop around between providers to see if there's better rates available but otherwise the deal is one you're willing to partake in or not.
You can fool some of the people all of the time. Concentrate on those people.0 -
Yes, but the price you pay will be determined by the issuer based on how long they think you will live.
1 Year, cheap; 10 years expensive.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0