Protected savings... advice please

[Ann]

I have been told by a financial advisor that a relatives savings can be moved from a building society to Legal and General and thus be tax free and "protected" should she need to go into a care home. Surely this can't be correct, as everyone would be doing it. Also I thought the only tax free savings were ISAs and there is a yearly limit to put money into those.....

[ubasses]

There is a scheme, my mother has 2 one is AXA, where the money is paid into an investment and as long the Company pay the fees direct to the Care Home the money will be tax free.

[Ann]

No this is different - the money is put into a savings account to protect it from ever being used for care home fees! In other words the amount you put in remains yours for the future. - sounds very odd to me.

[factor-fiction]

There are such schemes but you have to be careful- I remember something on Rip Off Britain recently about this

[abstibus]

L&G - don't start me.

[ubasses]

http://www.thisismone...iting-fear-death.html

The above may be of interest to you. Basically if you are perceived as having done anything with your assests just to avoid the fees Social Services can go back an unlimited number of years to recover the funds.

[Ann]

Why anne?

[abstibus]

I had a recent rather nasty shock relating to a long-term investment with them - they took over my initial, very reliable, pension fund company some years ago when markets were performing well.
They stopped annual bonuses straight away and the returns have been abysmal ever since.
I would have been better playing the market myself.

[Ann]

You never know who to trust these days.

[abstibus]

Too right, Ann
I suppose it's the old adage that if something is too good to be true, then it is.
My recollection is that some of the care fees are paid from benefits (pensions, attandance allowance) so it's never as bad as it seems.
I'd have a word with the CAB - they don't take commission, like 'financial advisors' do, and will give you unbiased advice.

[Ann]

When my father in law went into a care home in 2002, I rang up about his attendance allowance, to explain I didn't think we ought to still be getting it as he wasn't at home now, I got a curt reply "that it will be looked into" and stopped if necessary (it wasn't so I wrote a letter too) Three months later when he died, I got an extremely rude letter re AA saying he had been claiming it illegally while in a Care Home situation and were the family aware "we could be prosecuted?" Needless to say I was extremely angry and had kept it on one side anyway and paid it all back, but their attitude shocked me! Our local CAB has closed due to lack of funding!

[abstibus]

Ann
Have a look at Age Concern online. They explain everything very clearly (Section 7).

[boxtops]

However, I suspect that the financial advisor is pointing you to Legal and General for a purpose..... they can't be the only company offering this cover. If it interests you, you need to shop around.