A-Z

Lynne

Age at interview: 65
Brief Outline:

Lynne’s parents self-funded care

Lynne’s parents, a retired carpenter and hairdresser, had substantial life savings so Lynne knew that when it came to care they would have to self-fund. She arranged annuities to pay towards the fees when her parents moved into residential care. 

Background:

Lynne, aged 65, is a retired Financial Director. When her parents needed to pay for care, she consulted a financial adviser who specialised in later life care plans. Lynne trusted the adviser and felt they were genuinely working for the family’s benefit.

More about me...

Lynne’s parents were urgently moved into a care home on the recommendation of adult social care. Both her mother and father were living with dementia which was causing aggravation between them. The local council adult social care department arranged for six weeks’ residential care while the family explored their options. The care home was not suitable and did not provide the services required for people with challenging behaviour. Lynne asked adult social care for help in finding a suitable home but they could only give a list of local care homes, they do not recommend specific homes. Although Lynne accepted that her parents would have to pay for their care, she felt let down by the authorities in finding a place that could really meet their needs.

Lynne spent time researching on the internet to familiarise herself with the systems around care and funding. She found Age UK and Dementia UK really helpful websites. Also, Age UK had advisers at the memory clinic where she could talk to someone face to face. Lynne found it very helpful to talk to friends who had similar experiences with their parents and she attended a course for carers run by her local council which was very informative. She had found out about financial care plans and annuities when she was first caring for her parents in their home but these plans can only be purchased at the point of paying for formal care.

Lynne and her brothers chose a care home that would be able to look after their parents for the rest of their lives. It was one of the most expensive in the region but Lynne feels that they are getting the best care and she is reassured that they will never have to move no matter how their needs change. Lynne negotiated a discount with the home because they were paying for two residents and the home also agreed to cap the annual increase in fees. When applying for the annuity, the financial adviser needed to know all her parents’ financial information including pensions, assets, investments and Attendance Allowance they also consider the medical history of the person needing care. There are complex options relating to the annuity, for example, you can choose to index-link the plan, defer the payments and decide what proportion of the care costs to cover and what will be paid out of pensions and other income.

Lynne is very pleased with the service she received from the financial adviser. She feels that, although the annuity took a large proportion of their parents’ assets, purchasing the annuity has given the family peace of mind, knowing that the value of the family home will be protected.

 

Lynne explains that her father had a good pension income but her mother’s pension was much smaller.

Lynne explains that her father had a good pension income but her mother’s pension was much smaller.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

And also the fact that like my father has a very good pension plus the government pension, plus attendance allowance, and my mum has private pension but it’s tiny compared to my father’s her government pension is less than my father gets, her attendance allowance is the same. But her care fees are exactly the same so there’s a huge imbalance of how much you need for each person.

 

Lynne tells us how she found out about care annuities.

Lynne tells us how she found out about care annuities.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

So I’d heard about annuities and care fees plans; and I had heard about them years ago and I don’t know how but I had. But they, you can only apply for those when a person is in care; so that, sort of prior to mum and dad going into care there was no point in looking into it. but when I went to the care home, the, the one that we’re in now, they gave me leaflets about all of that and gave me a contact and said this woman was very good and very useful and the care home were very good at trying to help in that sense. So I contacted this lady; and I’m trying to think of the name of [laughs] the company; I can tell you afterwards. Oh I can’t, can’t think what they are called. But they are literally a broker because you can only do it through brokers, and there are only two or three companies in the UK that do it [laughs].

There you go. So you’re quite limited anyway. I knew it was an expensive option but anyway I approached this lady and she was really, really helpful, really helpful, and gave me lots of information to read before I decided whether to go that route or not.

 

Lynne explains how they shared the cost of the care annuities between her parents’ incomes.

Lynne explains how they shared the cost of the care annuities between her parents’ incomes.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

And also the fact that like my father has a very good pension plus the government pension, plus Attendance Allowance, and my mum has private pension but it’s tiny compared to my father’s her government pension is less than my father gets her Attendance Allowance is the same. But her care fees are exactly the same so there’s a huge imbalance of how much you need for each person. So when we worked, they, they worked the figures out literally on there’s my father, how much, they work out how much pension he gets a month, his total income, then how much the care fees are, and how much of that you want to get a plan for, so, and they do the same for mum. So obviously because mum’s pension was far less than dad’s mum needed a bigger care fees plan than dad did, but what we decided to do was, because mum will receive half of dad’s pension [laughs] if he dies first, was to balance, equalise it out so that they more or less get the same each month from their plan to pay for their fees, but of course because of ages, illnesses, everything else, the costings were slightly different. So it, it, it’s [laughs] honestly; and then you’ve got to take into account if you want to index-link it, if you want to defer it yeah, there, there’s just so many permutations of what to do [laughter] so.

 

Lynne decided to index link her parents’ care annuities to increase each year.

Lynne decided to index link her parents’ care annuities to increase each year.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

And one thing the broker said to me was, “If you want to go back to the care home and say to them, look, you’ve, the, you know, you’ve taken out this care fees plan, so they are going to be guaranteed X amount of money for, £3,000 a month, for the rest of that person’s life.” I’ve index-linked it at five percent a year, so every anniversary it increases by five percent; I haven’t told the care home that, because the care home and the broker they don’t talk. But I went to the care home and I said, “Look, I’ve got this policy, it’s going to pay out every month for the rest of mum and dad’s life, will you do a deal with me to cap the yearly increase to say three percent or four percent?” And they initially turned that down, but I went back to them again and said, “Look, I don’t agree with the arguments you’ve put forward for this and I’d like you to seriously think about this because you are getting this amount every month,” and I just reiterated it all. And they came back and they agreed to cap the increase at four percent a year for four years; so I gained one percent a year [laughs]. But that, you know, that wasn’t the point. But I’ve managed as well to make sure that it, that, you know; so the, this year was the one year anniversary and [name of insurer] just automatically put it up and the care home will automatically put it up as well, but it will be covered, so. But I, you know, I did, on one of my spreadsheets, no index-linking, and it made a huge difference to the...

Because you would have to be contributing to that...?

I’d have to contribute that increase every year, yeah, for both of them. So it did make quite a difference, and over a long term it probably narrowed, probably took at least a year off of the fees if I’d have been paying it myself, you know, it shortened the time by about a year. So yeah, I felt index-linking was quite important.

 

Lynne paid for the annuities from her parents’ savings, leaving the house ‘ring-fenced’ for the children.

Lynne paid for the annuities from her parents’ savings, leaving the house ‘ring-fenced’ for the children.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

My brothers and I worked on; we had two options really. We could not take a care fees plan out and we could just drip feed the money if they lived longer than; oh I did so many spreadsheets it’s untrue. But if they lived, they could live for about ten or eleven years but we would use every single penny up that they had, because I mean the care fees are £132,000 a year for the pair of them or we could spend this pot of cash that they had, which guaranteed their fees, because obviously their pensions would keep paying while they’re alive, the fee, the plan would guarantee to pay their fees forever, till they died, and it meant that the house was completely not needed, because obviously that’s our inheritance [laughs] which sounds really selfish, but mum and dad would be horrified if we spent that money on care fees plans, because they’ve always said, and their wills reflect, "that is for you three children".

 

Caring for parents is difficult but Lynne says buying the care annuities took away the worry about money.

Caring for parents is difficult but Lynne says buying the care annuities took away the worry about money.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

I think having purchased the annuities seems to have sort of taken away a lot of the uncertainties around all this for you?

Yeah, it was a huge relief, because I was paying out, you know, 11 and a half grand a month and seeing their cash diminishing, even though they had a lot of it [laughs] but, you, you know, each week, each month I could see it diminishing, thinking oh my God, you know, two years there won’t be this cash or, you know. So it was, yeah, it was an, a pressure I didn’t need, on top of everything else that mum and dad, you know, present...

Yeah, yeah it’s a difficult time.

...so it, you know, I know that every month they’re going to get their pension, every month they’re going to get their care fees plan, and all of that covers the care fees. So even if anything happens to me that will still carry on, you know, that’s, yeah, it is a huge relief.

 

Lynne says it’s important to check the information you get if you are not happy with decisions.

Lynne says it’s important to check the information you get if you are not happy with decisions.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

But I just, you’ve just got to arm yourself, you’ve just got to look everywhere for information, speak to people; and don’t take, don’t always take what Social Services and Mental Health say. They don’t always know what they’re talking about when it comes to care homes and fees and the rules, the legislation; you’ve really got to know what you’re up against. It’s a minefield [laughs] and I don’t know how to not make it a minefield, I really don’t.

 

Lynne threatened to stop helping her parents unless the council gave her some advice.

Lynne threatened to stop helping her parents unless the council gave her some advice.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

So I had several meetings with Social Services about this, because I said, “Look, you’re the experts, I need help, you know, I’m just me,” I said, “and if you don’t help me I will walk away and then you will have to sort it out.” And I did come across a social worker who was very, very good and helped me; I think she realised what I was up against and she did help me. But I said to her, “I would like [name of county] Council to recommend or give me homes that can cope with challenging behaviour, because I don’t know who can cope and who can’t.” Anyway they recommended a couple of homes.

 

Although Lynne feels the system is unfair, she is happy her parents can afford the best care they can get.

Although Lynne feels the system is unfair, she is happy her parents can afford the best care they can get.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

How; that’s just not right, not right. So on one hand I don’t think it’s right my parents have to pay for their care because my dad is still paying tax, and they’ve paid tax and national insurance all their lives, they’ve never ever been on any benefit, ever, they’ve worked hard to get what they’ve got but they’re still having to pay for their care. But on the other hand we’re very fortunate that we can pay for care, because I know they’re getting the best care that they can get. So it’s a real swings, you know, it’s a dilemma that you, that I have, you know, is that I want Matt Hancock to do something about it, but then, on the other hand, my mum and dad are fairly privileged.

 

Lynne complained to the bank about letting her parents accumulate too much money in their current account.

Lynne complained to the bank about letting her parents accumulate too much money in their current account.

SHOW TEXT VERSION
EMBED CODE
PRINT TRANSCRIPT

What happened was they banked with Lloyds [laughs] and when I managed to, I say gain control, that’s quite a strong word, but when I managed to intervene in their financial affairs, it was obvious that they weren’t coping with all their money; they didn’t even realise they had all this money; and I had a go at Lloyds Bank because there was, you could have bought a small house with what was in their current account, and I just had a go at Lloyds for like, “Well, you know, you can’t let them.” If someone had got their bank card like, you know. So the first thing I did was to move their money about so that it was safe, and then because I knew they’d got a lot of money; I have a financial advisor and I invested some through him in their name.

Previous Page
Next Page