Nursing home fees

equity income
1. advantages
  1. dividends paid net of 10% tax credit
  2. divs should rise over time
  3. higher div payments since credit crisis
2. disadvantages
capital disposals
1. CGT annual allowance
Purchased Life Annuities
high yield bonds
1. IMA Sterling High Yield
  1. 80% sterling (or hedged back) FIS
    1. 20% foreign currencies
  2. 50% sub investment-grade debt
    1. below BBB-
    2. corporate bonds
    3. convertibles
    4. PIBS
    5. preference shares
2. advantages
  1. higher income yield than equities
    1. 5-7% average yield
  2. choice of payment frequencies
  3. easily liquidated
    1. possible gain
  4. interest paid net
    1. reclaimable if non tax-payer
  5. active management (funds)
3. disadvantages
  1. income not guaranteed
  2. unlikely to keep pace with inflation
  3. charges deducted from capital
  4. value can fall/rise
    1. equity-like volatility at high-yield end
Long term care
1. Care Bill
  1. personal contributions cap - £72k
  2. increase in means-tested threshold - £118k
  3. April 2016

Resource summary

	Created by Paul Dawson about 11 years ago