Immediate Needs and Care Fees Annuity

An immediate needs annuity, sometimes known as a care fees annuity is a enhanced rate later life purchased life annuity.

Purchased life annuities mean that you buy an annuity with your own savings rather than a pension annuity bought with your pension fund to buy a guaranteed income.

• Pension annuities are taxable to income tax.
• Purchased life annuities are treated as a part return of capital and part taxable income.
• Immediate needs care fees annuities are paid tax free provided the annuity is paid direct to a registered care provider to cover your care costs.

Immediate Need Annuity Key Points

• You must already be in residential care.
• Used to cover your care fees in full or if you have a shortfall in income to cover your care costs.
• Tax free income if paid to the care home direct.
• There is no cash in value, and you cannot stop the annuity, it is paid for life.
• The annuity income payments are usually inflation linked to protect you from increases in care fees costs.
• There can be capital protection if you die prematurely but usually only if you pass away within 6 months.
• You are never too young.  Immediate needs annuities are available for people in care

Pros and Cons

• If you die prematurely, the money is gone (unless within 6 months)
• If you live for a reasonable period in care, you have security that your care fees are covered rather than exhausting all your other assets to pay for care by offering inflation linked protection for life.

Why Now?

Interest rates and therefore government borrowing rates have been low for many years but are now much higher.  This means that annuity rates are the highest they have been for many years.  This is starting to make immediate needs care fees annuities popular again.

Application

There are several immediate needs annuity providers in the market and more coming on stream.  To compare and then apply, we will work with you to complete a full medical health and care needs questionnaire, this must then be sent to each immediate needs annuity provider for them to underwrite and offer an annuity quotation and terms before applying for a paying for your care annuity.

Want a Cheaper Care Fees Annuity?  See:Deferred Care Annuity

Contact  Call Back  Calculators  Our Fees