funding mum's care home costs
Discussion
How would the PH collective deal with this ?
Mum (85) was admitted to hospital just before Christmas and didn't recover to the point where she could safely return home. There was a combination of parkinsons, dementia and some associated delirium from the episode that she suffered. We fortunately put LPA's in place when she was 100% with it in the summer of 2020. At that time she re-stated a firm wish that she'd expressed for a number of years that she wanted to go to a particular care home in the village when she got to the point where she is no longer able to be independent. She's managed remarkably well in the 10 years or so since Dad passed. We've managed to get her a place in the care home she wanted to be in. Now we have to figure out how to pay for it !
Care home fees are fairly astronomic at 7.5 k per month and she has savings and assets such that she won't get state support and will have to self fund the fees. After her widows pension etc, we are having to find roughly 5.5 k per month. Mum has enough savings to cover close to a year's fees but the clock is ticking and we will sell her house to fund the future fees.
Say for arguments sake that the sale proceeds netted 600 k, where would you invest this to generate some income, whilst not taking too much risk, to cover future fees. I don't see much point in sticking it in a bank and earning 0% or close to it. Neither do i want to put in all into equities. Would something like a Vanguard life strategy 20 fund be worth considering (80 % bonds 20% equity) or are there other suggestions on how we might approach this. If we could achieve 3-5% returns, generate some income, spend some capital, would that seem like a reasonably prudent approach ?
Any thoughts much appreciated
Mum (85) was admitted to hospital just before Christmas and didn't recover to the point where she could safely return home. There was a combination of parkinsons, dementia and some associated delirium from the episode that she suffered. We fortunately put LPA's in place when she was 100% with it in the summer of 2020. At that time she re-stated a firm wish that she'd expressed for a number of years that she wanted to go to a particular care home in the village when she got to the point where she is no longer able to be independent. She's managed remarkably well in the 10 years or so since Dad passed. We've managed to get her a place in the care home she wanted to be in. Now we have to figure out how to pay for it !
Care home fees are fairly astronomic at 7.5 k per month and she has savings and assets such that she won't get state support and will have to self fund the fees. After her widows pension etc, we are having to find roughly 5.5 k per month. Mum has enough savings to cover close to a year's fees but the clock is ticking and we will sell her house to fund the future fees.
Say for arguments sake that the sale proceeds netted 600 k, where would you invest this to generate some income, whilst not taking too much risk, to cover future fees. I don't see much point in sticking it in a bank and earning 0% or close to it. Neither do i want to put in all into equities. Would something like a Vanguard life strategy 20 fund be worth considering (80 % bonds 20% equity) or are there other suggestions on how we might approach this. If we could achieve 3-5% returns, generate some income, spend some capital, would that seem like a reasonably prudent approach ?
Any thoughts much appreciated
Don't think income vs capital, think total return, especially as you expect to be selling down.
Remember LS has a UK bias which has arguably hindered performance compared to an equivalent equity:bond ratio fun without that bias over the past 10 years, who knows if that wil revert or not?
What happens if the money runs out? i.e. do you take low risk to minimise the risk of losing the lot, or could you take high risk in the hope of covering the fees from investment returns, hoping to be left with capital, but knowing she won't be on the street if you lose badly?
Remember LS has a UK bias which has arguably hindered performance compared to an equivalent equity:bond ratio fun without that bias over the past 10 years, who knows if that wil revert or not?
What happens if the money runs out? i.e. do you take low risk to minimise the risk of losing the lot, or could you take high risk in the hope of covering the fees from investment returns, hoping to be left with capital, but knowing she won't be on the street if you lose badly?
Left field question: is there any way she could move in with you? You could hire carers and get the mobility kit installed to help and still have a lot of change from £7.5k a month. Just a thought because you might be able to save a lot of money, and keep her in the comfort of your home.
Also I am sorry your Mum's health has declined mate, all the best with it.
Also I am sorry your Mum's health has declined mate, all the best with it.
Thanks all for the replies. Mum has been adamant for 15 years or so that this is where she wants to be. Doesn’t want to be a burden on us etc etc. We need to respect her wishes even though she can no longer decide for herself. In Surrey / Berks , for a care home with an outstanding rating, this seems to be the going rate. It’s mums money and it’s what she wanted. House sale will fund 10 years + but she won’t last that long. She’s quite frail. My question was more about best short to medium term investment options and less to do with different care options. But I do appreciate everyone’s thoughtfulness
I think it's worth asking an IFA - depending on how she has invested so far there are Alternatively Secured Pensions which might be worth investigating (I do not know the rules anywhere near well enough if there is a good tax advantage from them, but on 600K if you were seeing 5% returns you would be into taxable territory so it's worth looking at I think)
You know there is the Intelligent Money thread on here too? They may have something that works. Since you aren't concerned about capital erosion it gives you more latitude I think. No real need to be so heavily into bonds. Even if you went 100% in equities and they halved, you'd have several years for them to recover before it became an issue. Not that I'd recommend going 100% in!
You know there is the Intelligent Money thread on here too? They may have something that works. Since you aren't concerned about capital erosion it gives you more latitude I think. No real need to be so heavily into bonds. Even if you went 100% in equities and they halved, you'd have several years for them to recover before it became an issue. Not that I'd recommend going 100% in!
Flooble said:
I think it's worth asking an IFA - depending on how she has invested so far there are Alternatively Secured Pensions which might be worth investigating (I do not know the rules anywhere near well enough if there is a good tax advantage from them, but on 600K if you were seeing 5% returns you would be into taxable territory so it's worth looking at I think)
You know there is the Intelligent Money thread on here too? They may have something that works. Since you aren't concerned about capital erosion it gives you more latitude I think. No real need to be so heavily into bonds. Even if you went 100% in equities and they halved, you'd have several years for them to recover before it became an issue. Not that I'd recommend going 100% in!
Second an IFA, 7,500 a month is a lot (I think my mum was 4k but didn't have any complications) but consider her comfort and the duration of the stay. You know there is the Intelligent Money thread on here too? They may have something that works. Since you aren't concerned about capital erosion it gives you more latitude I think. No real need to be so heavily into bonds. Even if you went 100% in equities and they halved, you'd have several years for them to recover before it became an issue. Not that I'd recommend going 100% in!
Average care home stay is around 20 months, less for many with compromised health.
This situation is faced by so many - the thought of actually looking after them yourself certainly crosses peoples minds but it is a full time job you will have to give up your paid work.
You will also have to deal with bed wetting (and sadly worse). I know family members who don’t live in but go round daily and having to clear up human poo in the bathroom and elsewhere is so hard.
You also have the bathing of them fully which plenty wouldn’t feel comfortable with (plenty would of course).
It can also cause relationship issues between husband and wife - especially if only 1 parent gets the help not the other family.
Tough choices both emotionally physically and financially.
You will also have to deal with bed wetting (and sadly worse). I know family members who don’t live in but go round daily and having to clear up human poo in the bathroom and elsewhere is so hard.
You also have the bathing of them fully which plenty wouldn’t feel comfortable with (plenty would of course).
It can also cause relationship issues between husband and wife - especially if only 1 parent gets the help not the other family.
Tough choices both emotionally physically and financially.
Very sorry to hear about your predicament. I don't if it helps but my wife and I faced a similar situation about 3 years ago when we had to look after an elderly cousin of hers who had Parkinson's and dementia. We eventually managed to secure Continuing Health Care (CHC) funding for him so his care home placement is funded by the NHS. I don't know how severe your mothers illness is but to put it into context our cousin was bed bound, doubly incontinent, suffered from hallucinations and was delusional, he would also frequently refuse to take his medication. If you think your mother could be a candidate for CHC funding I believe that it is possible to initiate the CHC process from a care home setting. I hope I haven't taken your thread off on a tangent and once again sorry to hear about your mother and wish you all the best for the future.
Had a similar situation with my 89 year old father 10 years ago. Had a fall and broke his hips. After hip replacement, we were advised he could come home but would need 24 hour waking care. This was costing £6000 a month ( 10 years ago !) , including oil heating on 24 hours a day as he felt the cold, higher electricity bills as lights on etc over night, having to supply food for the 2 carers who were always on site , washing machine in almost constant use etc. We had this for 18 months until he passed away. Luckily, he was in a position to afford this without having to sell any of his properties, but it knocked a big hole in his savings.
In the same boat with my Mum. Looking at homes this weekend, Oxon, fees ca 5k/month.
She has vascular dementia. Not severe at present but is struggling even with twice daily carer visits in her flat.
She is physically in great shape - 85 yrs old and no meds barring vitamin D as she rarely goes out. Family all lived well into their mid/late 90s.
So depending on how her condition develops she could well have another decade or so in her, but her funds will cover 5yrs max. So you end up half hoping she will snuff it before the money runs out.
The system stinks but it is what it is. Private care is often good quality but dependent on having the cash. Once your Ma/Pa has been completely sucked dry of money and assets then they are basically chucked back at taxpayer funded social care which is expected, as ever, to deal with the consequences of this v obvious and predictable market failure.
If your parent has 'medical' needs requring medical care then the NHS will fund care in perpetuity, but if not you are on your own. Apart from 250 quid a month attendance allowance;)
I would be interested in investment ideas too. Anything that buys a few more months security would be worth knowing about.
Good luck OP. Also, where are you? 7.5k is pretty toppy.
She has vascular dementia. Not severe at present but is struggling even with twice daily carer visits in her flat.
She is physically in great shape - 85 yrs old and no meds barring vitamin D as she rarely goes out. Family all lived well into their mid/late 90s.
So depending on how her condition develops she could well have another decade or so in her, but her funds will cover 5yrs max. So you end up half hoping she will snuff it before the money runs out.
The system stinks but it is what it is. Private care is often good quality but dependent on having the cash. Once your Ma/Pa has been completely sucked dry of money and assets then they are basically chucked back at taxpayer funded social care which is expected, as ever, to deal with the consequences of this v obvious and predictable market failure.
If your parent has 'medical' needs requring medical care then the NHS will fund care in perpetuity, but if not you are on your own. Apart from 250 quid a month attendance allowance;)
I would be interested in investment ideas too. Anything that buys a few more months security would be worth knowing about.
Good luck OP. Also, where are you? 7.5k is pretty toppy.
jned2 said:
Very sorry to hear about your predicament. I don't if it helps but my wife and I faced a similar situation about 3 years ago when we had to look after an elderly cousin of hers who had Parkinson's and dementia. We eventually managed to secure Continuing Health Care (CHC) funding for him so his care home placement is funded by the NHS. I don't know how severe your mothers illness is but to put it into context our cousin was bed bound, doubly incontinent, suffered from hallucinations and was delusional, he would also frequently refuse to take his medication. If you think your mother could be a candidate for CHC funding I believe that it is possible to initiate the CHC process from a care home setting. I hope I haven't taken your thread off on a tangent and once again sorry to hear about your mother and wish you all the best for the future.
We’ve had the CHC assessment and mum isn’t poorly enough !! Not bed bound but immobile, incontinent, delusional etc. Those are care needs not health needs apparently. We are getting funded nursing care to cover things like meds, bed sores etc. But that’s 200 quid or so. The system stinks. Mother went into a local authority care-home back in February, now has dementia and is very frail so there's no way she could be at home anymore, she was 87 on Thursday.
The council have her house down as a charge for when she eventually goes, so at the moment we've started to refurbish it for eventually renting it out at the end of the year. It needs everything: kitchen, bathroom, plastering, redecorating, flooring etc. etc.
I think the costs are something like £950 a week or so, so her pension and the rent will cover the majority of it and cash she has will soak up the costs so far.
Criminal amounts of money considering how much she'd paid in tax/NI over the years and being penalised for owning her own home.
OP, £7.5k sounds outrageous.
The council have her house down as a charge for when she eventually goes, so at the moment we've started to refurbish it for eventually renting it out at the end of the year. It needs everything: kitchen, bathroom, plastering, redecorating, flooring etc. etc.
I think the costs are something like £950 a week or so, so her pension and the rent will cover the majority of it and cash she has will soak up the costs so far.
Criminal amounts of money considering how much she'd paid in tax/NI over the years and being penalised for owning her own home.
OP, £7.5k sounds outrageous.
Have a watch of the below for some useful info which was passed to me from a care home manager
https://youtu.be/XGJZ0E6ofxM
If you would like to contact Nicky Cave, she can be reached by freephone number 0800 082 1155 (her or anyone on that line will be able to help them) or email advice@eldercaregroup.co.uk .
https://youtu.be/XGJZ0E6ofxM
If you would like to contact Nicky Cave, she can be reached by freephone number 0800 082 1155 (her or anyone on that line will be able to help them) or email advice@eldercaregroup.co.uk .
I have had a thought OP. First things first; I am not a financial advisor, this is just based on my experience of sorting out my Dads estate and inheritance tax.
This is could sound a bit callous, but I think it’s worth thinking about now. If you sell the house now, where do you stand on the inheritance tax? I made use of the tax allowance with my Dad’s estate because his house was his primary home. If you sell the house now you might lose that. There might be other tax allowances for your situation, I don’t know but I do think you should get some pro advice.
This is could sound a bit callous, but I think it’s worth thinking about now. If you sell the house now, where do you stand on the inheritance tax? I made use of the tax allowance with my Dad’s estate because his house was his primary home. If you sell the house now you might lose that. There might be other tax allowances for your situation, I don’t know but I do think you should get some pro advice.
Tebbers said:
What exactly is it about the system that stinks? I’m sorry to hear of your situation but it sounds to me like you just don’t want to spend the money on care (presumably to preserve your inheritance) and would rather the taxpayer coughed up £5k a month instead.
In my mum's case - she's most certainly not rich - and she now faces having to watch what remained of her savings being used up and then her house slowly being taken from her ( as she sees it ) to care for her husband at over 4K a month after his pension is taken into account. She worked all her life and can't understand why the small house they've paid for can now be effectively sequestered when other folks who, because they have very good accountants or no traceable assets get the same care in the same home that she's paying for.
It's having a real impact on her mental health. Inheritance wise, for our part, my 3 brothers and I have always told our mum & step dad that as long as there is 1p left in the bank after the funerals are over, then they should enjoy the fruits of their hard work.
This is no longer happening, mum refuses to spend any money on anything "nice" for herself as she thinks that she will get in trouble for spending on herself whilst paying for her husbands care.
That's what stinks.
Tebbers said:
What exactly is it about the system that stinks? I’m sorry to hear of your situation but it sounds to me like you just don’t want to spend the money on care (presumably to preserve your inheritance) and would rather the taxpayer coughed up £5k a month instead.
There won't be any inheritance because she will spend it all. I don't care about that anyway tbh, although I know my Mum wanted/expected to be able to leave her grandchildren something. It's the uncertainty of not knowing what will happen to my Mum when the money runs out that is the worry.
She has paid tax and NI all her life, and there should be a more certain provision for her, and the thousands like her, in their old age when they are at their most vulnerable.
Also, if you can find an extra 5k a month down the back of the sofa, Good for you. For me and my sister it would/Will be a struggle.
it is what it is, as I said. But hard to argue that the system as it stands is a good one.
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