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Jane

Age at interview: 60
Brief Outline:

Jane’s mother self-funded care from age 85

Jane consulted a financial adviser about ways to pay for care for her mother. She was very pleased with how the adviser explained the options and she decided to purchase an immediate needs annuity to pay towards care costs and protect her mother’s remaining capital.

Background:

Jane, aged 60, is self-employed, working part-time. Decisions about her mother’s care were made along with her brother and sister but, since Jane gave up full-time work to spend more time with her mother, most of the care management fell to her.

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Jane’s friend recommended consulting a financial adviser to find out about ways to pay for her mother’s care. Jane decided to purchase an immediate needs annuity that would pay towards the costs. The financial adviser made the options very clear and set out scenarios that she could talk over with her brother and sister. They opted for an annuity that covered part of the cost of care and the remainder was paid from her mother’s pension income and Attendance Allowance. The annuity was paid for with her mother’s savings and investments and this meant that the capital value of her mother’s house was protected for the family. Jane’s mother had always run the family finances and she had saved and planned so that her later years would not be a worry for her children. Jane says that the best thing about buying the immediate needs annuity was the peace of mind; it took away the stress of thinking about money so that the family could enjoy their time with their mother.

Jane’s mother had lived independently well into her eighties. When her sight began to deteriorate, she bought a property in a warden-supported development. She became ill with dementia-like symptoms and, following a period in hospital for an undiagnosed condition, she moved to a care home. At first she moved to a dementia wing, but her cognition improved and she was able to move into the residential wing. When choosing a home, the family asked the warden at her apartment for recommendations and then checked out more details of care homes on the CQC website. Most importantly, Jane says, there is no substitute for visiting the homes in person, that way you can see the things that you know are important to your loved one, for example, a sunny room or access to a garden.

Jane realised that self-funders pay more than other residents for places in care homes. However, she feels that gives more choice and control over care options, which is exactly what her mother had wanted. Jane’s mother had arranged Powers of Attorney for her children many years before it was needed so they were able to make arrangements for care and selling her property. Also her mother had been open about her preferences for care and had discussed this with the family which Jane feels is very important and makes decisions a little easier when the time comes.

 

Jane and her mother had always talked about what sort of care she would prefer.

Jane and her mother had always talked about what sort of care she would prefer.

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I think not, not quite an answer to that but I think my one main observation, which worked for me and my mother because it’s how we, she was and I am, is not to wait for the absolute crisis and is to have those discussions and some thought beforehand about where, you know, so that; I mean I, because I had largely taken over the management of her money because of her eyesight I knew where all, you know, her investments were and over time was able to sort of bring them together so they weren’t as fragmented and didn’t have to deal with so many bodies and so the rationalisation, if you like, of her finances. So it was, when I look back on it, in a sense there was quite a long lead-up to it and we had talked about what might make a nice care home or what sort of thing would be important to her and some of those were serious conversations and some of them were quite light-hearted. But it did mean that when it came to the crunch I felt very confident that I knew what she would have want, what she wanted what was the best I could achieve and what the family were happy with. So we didn’t, you know, fortunately we didn’t have any major rows or upsets or difficulties but I know of plenty of people who, for whom, and I understand why, it’s an entirely human reaction, which is either it comes out of the blue and you didn’t see it coming or you put it off because it’s not a comfortable conversation. For me that was the one huge benefit was that I didn’t, it wasn’t a shock or a surprise and my mother was fortunate to manage until her mid-eighties so for, and that’s what made it so much easier than it could have been to organise and to sort out.

 

Jane’s mother arranged Lasting Powers of Attorney years before they needed to be actioned.

Jane’s mother arranged Lasting Powers of Attorney years before they needed to be actioned.

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Well the Power of Attorney actually my mother organised. She was a very pragmatic, forward-planning woman; she had been on her own for quite a long time, was very used to managing all her own affairs and it was only, it was partly the wisdom of just knowing that the time would come when she would need some help, but also as her eyesight faded then that’s when things became really difficult for her and so actually she put in place the Power of Attorney some years before, I’m try, she would have been in her seventies, early seventies, I don’t remember exactly when...

When she was still living independently?

...and so yes, and I remember her saying, you know, to me and my sister, “Right, I’ve, you know, I’ve done this, sign these forms.” So they were done and then put away and weren’t used or even thought of for quite some time possibly even ten years; I don’t remember specifically but a long time before.

 

Jane’s mother used income from various places to pay for her care home.

Jane’s mother used income from various places to pay for her care home.

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The income, her income streams, which was her own, her own state pension and an occupational pension of my father’s so it was a widow’s pension, and she also had attendance allowance. So they were her three forms of income and then details of her investments at the time.

 

Buying an immediate needs annuity gave Jane’s mother the reassurance she needed.

Buying an immediate needs annuity gave Jane’s mother the reassurance she needed.

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And as, peace of mind, especially for your mum?

Oh it was huge, it was huge. You, you could see that she, and I could just tell her every time, “The money will never run out, you know, it doesn’t matter if you’re here when you’re a hundred and ten” [laughs]. You, you know I mean it was never likely to happen but, you know, the, the point was that she could be assured that she would be, she was paying her own way, because that’s how she felt about it and it would have, and it would have worked. And as it happens, my friend who did the same thing for his mother, he won on the deal. So, you know, in a sense I think well there are winners and losers in, in insurance, because that’s what it is really, and I know somebody who did very well out of it and we got what we wanted. So I would recommend it but it has to be done obviously in the light of the figures and the information and the money that’s available, and it wouldn’t suit everybody, and I think if it had taken all the money then I’m not sure that I, we probably wouldn’t have done it but had we done it then I think we might have felt less sanguine about it afterwards, but because we could do it and cut the cake, so to speak, it was fine.

 

Jane contacted a financial adviser to look at options for paying for care.

Jane contacted a financial adviser to look at options for paying for care.

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Because; and the recommendation came from a friend of mine who had done the same for his mother and he put me in touch with this specialist advisor who I thought, who was great, as far as I was concerned. They were I never felt under any pressure, they just were able to, they took the facts in terms of the expenditure and the money and the, what was invested and what could be realised and just distilled it down into a really straight forward black and white unemotional assessment of, well it will cost you this and the capital will decrease at this rate if you do nothing and it will last X, you know, it was, some might find it quite brutal, I found it quite comforting really that somebody else had looked at the figures and had reflected back to me the sort of issues that I had been considering and discussing and the and I did discuss it with my mother at times when she was obviously able to have that conversation.

 

Jane describes the medical information the insurer needed to work out the cost of the care annuity.

Jane describes the medical information the insurer needed to work out the cost of the care annuity.

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It was the GP or, I don’t believe, and I think I would know, I don’t believe there was ever any independent medical assessment done, I think they wrote to the GP and; because I remember seeing, the GP shared a copy of the letter that he wrote with my mother, so I saw it which again described the health conditions of, and the projected likely length of life and as far as I’m aware that’s the only medical report that they provided. I mean she didn’t have an identified terminal condition; I suspect if you did then they might well seek further reports, because that would affect, obviously, very much the arrangement, the insurance policy, but it didn’t apply in my mother’s case.

 

It was important to Jane’s mother to ‘pay her own way’ and leave some inheritance to her children.

It was important to Jane’s mother to ‘pay her own way’ and leave some inheritance to her children.

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And for us the great advantage was that it took about a third of her estate to pay for the annuity but it guaranteed the continued payment for as long as she needed it and two-thirds was then protected for the children to inherit and so it gave her the peace of mind that she wanted. The breakeven point on the policy would have been four years and she didn’t live that long, she lived eighteen months, but as far as I’m concerned, and I know she would say the same if she, it was absolutely the right thing to do for us as a family, because it gave her peace of mind, it gave me peace of mind because I wasn’t thinking, you know, what am I going to do...

What happens next, yeah.

...you know, if she happens to be somebody who lives for a very long time and, you know, where would I find that money? So it was, that gave us back a bit, if you like, the taking away a stress and thinking about money and just enjoying the time; and she was in an extremely comfortable home, she had all the services that she wanted and whilst, you know, it would have been nice if she’d lived a bit longer it did exactly what we wanted it to do and I was always very grateful for it [care plan] and the family I’d talked to my siblings about it, they were quite happy to leave it to me and my mother to decide but they knew full well what the deal was and in a sense that they would if you like, lose a bit of their inheritance. but it was fine, you know, that was, that was the deal and it worked for all of us.

And as, peace of mind, especially for your mum?

Oh it was huge, it was huge. You, you could see that she, and I could just tell her every time, “The money will never run out, you know, it doesn’t matter if you’re here when you’re a hundred and ten” [laughs]. You, you know I mean it was never likely to happen but, you know, the, the point was that she could be assured that she would be, she was paying her own way, because that’s how she felt about it.

 

Jane suggests others consider annuities arranged through later life financial specialists.

Jane suggests others consider annuities arranged through later life financial specialists.

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But it, all the contact initially, certainly, and very large majority of it was on the phone and it was just, came across as somebody who, he really knew he his stuff and he had dealt with many different scenarios and could describe situations we might want to take into account. And, you know, in the early days when he was talking about, “Well this would be the sort of cost but, you know, have you considered, has you, have you discussed it with your siblings of what, how you would feel if your mother died quite soon on?” And so in fact he was getting me to make sure I’d thought through the consequences and was it the right thing to do and; so I felt very supported in the process and the information he gave me, I mean I’ve still got the report I had a quick look at it this morning to remind myself, you know, set out the options and I didn’t then or subsequently ever come across something that I thought oh I wish I’d known that, I would have done it differently. So I would have no hesitation in recommending them to other people. I, but I had, I suppose I did have the slight advantage that my friend had already told me about it, so I didn’t sort of ring cold and then get a real shock when I knew how much they were talking about because I’d already had that preliminary conversation. But in my dealings with them I thought they were excellent.

 

Jane said the conversation stopped after she was asked if her mum was self-funding.

Jane said the conversation stopped after she was asked if her mum was self-funding.

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At the time when you just asked for advice from the local authority, did they do any needs assessments or financial assessments with your mum?

No, because the fir, almost the first question they would, people would ask is, you know, is she self-funding and because there was never any, you know, never any doubt that she was I would say that and that would, I, you know, you got the sense that it’d immediately close down any line of enquiry.

 

Jane described looking for a care home in different ways at different times.

Jane described looking for a care home in different ways at different times.

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So in [County] it was rather more I started with a list of potential homes and Googled them, looked at the reports saw what I could find out, then asked around, did anybody have any individual knowledge, either, I mean whether as a carer or, you know, as, whether it’s a relative. In [Town], when I was looking to move my mother up to [Town] I asked friends first, said “Right, what homes do we know about?” and then, so I did it the other way round. So maybe that was influenced by the fact that I knew, the second scenario was based on the specific geographical location; so then it was about, OK, what do I know about those? Whereas the first time, whilst I wanted it to be fairly proximate, it didn’t have to be five miles or whatever, it didn’t have to be on a bus route on anything like that, and it could be fairly broad and sweeping. So I, I took at it from the other end really.

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