Using Deposits for Funding Care
Considering using deposits to fund care? Complete our enquiry form for a free, no-obligation, initial consultation.
Some people use deposits to fund their long term care.
Deposit Portfolios
We have all experienced the disappointment of discovering that a deposit account that was great when we invested is now paying a fraction of a percent in interest.
This is a significant issue with deposits accounts and managing them can be tricky, especially if you are doing so under a power of attorney. This can mean trawling the high street for accounts armed with your identity documents and power of attorney as well as numerous forms and checks.
We offer a deposit portfolio where we select a range of deposit accounts on your behalf and manage them with you to make sure you maintain a competitive rate. The money is held in your name but we do all the administration. You can see an online valuation 24 hours a day.
General Deposts
Advantages
- Your money is guaranteed up to £85,000 per banking licence
- Your money cannot fall in value (subject to the institution remaining solvent)
- You can get higher interest rates by tying your money up for a longer period of time.
Disadvantages
- Interest rates are generally lower than inflation so the real value of your money will be falling
- Interest rates are rarely sufficient to meet a care funding shortfall meaning that your money is likely to erode rapidly
- Interest rates that initially appear to be good are often revised downwards
- Watch out for ’bonuses’ paid in the first few months to make poor rates look good
- You may lose access to your money to gain higher interest rates. This may be a problem if your care needs change and your funding increases.
Risks
- Very low risk.
- The UK Government has demonstrated that it is reluctant to let deposit holding institutions fail (although there is no guarantee that they would take that view again).
- The £85,000 guarantee from the Financial Services Compensation Scheme is £85,000 for each banking licence. Many banks that look different are actually owned by the same company and operate under one banking licence. In these cases only one £85,000 is protected.