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Immediate Needs Annuity

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Immediate Need Annuities – What are they?

Immediate need annuities are specialist insurance policies that anyone at the point of needing care can buy to provide an indefinite income to help meet their care fees and remove any worry that money may run out.

They are available from age 60 and there is no maximum upper age limit.

The income can either remain static or escalate each year by a rate chosen by you -either a fixed rate each year or one which changes inline with some measure of inflation such a Retail Prices Index.

The income provided can be paid either to either a care agency - if care at home is required, or to any care home.

Escalating immediate need annuities are currently the only way of paying for care which provides indefinite annual increases in benefits, so if you want peace of mind and security, it certainly pays to investigate just how much an annuity would cost.

Why use an immediate needs annuity to pay for care?

By paying one single premium to buy any annuity not only will you be giving both yourself and the person needing care peace of mind that they can continue to afford their current care and will never need to move care homes, but you will also:

  • Help cap overall lifetime costs of care - thereby helping ensure any remaining money is protected for beneficiaries.
  • Benefit from any income being tax-free providing it is paid direct to the care home or care agency and they are registered with the Care Quality Commission (CQC).
  • Receive an escalating income (if you pay a slightly higher premium) which will help offset annual increases in fees.
  • Be able to more freely manage any remaining assets safe in the knowledge that the annuity should be able to continue funding the care. Providing the premium could be paid from just existing deposits or money, this could mean you may be able to keep any family home and even let it to provide valuable extra income.

How much Income do they provide?
Immediate need annuities will provide whatever level of income you request, either the full cost of care, or just the shortfall or difference there is between the cost of care and ongoing pension and benefit income, which will not only make the premium cheaper but will also to minimise any loss should death occur early-

  • The full cost of care, or to help keep the cost down
  • Just the shortfall in income you have.

Who are Immediate Needs Annuities most suited to?

Immediate Need Annuities are ideally suited to those who:-

  • Need to pay for their own care and not entitled to free NHS Continuing Healthcare
  • Are receiving care at home, or in a care home
  • Want the certainty and peace of mind that care fees can continue to be met for however long required
  • Want to cap the cost of care by paying a one-off premium to protect any remaining savings will be preserved for future inheritances
  • Don’t have a high attitude to investment risk and want certainty of income
  • Are professional Powers of Attorney (such as solicitors) and want to secure their clients care.
  • Sole POA’s who are the only beneficiary of the person needing care and they want to ensure care would continue even if they died before the person receiving care
  • Need care and have an Inheritance Tax Liability as the premium paid will not only help pay their fees, but the premium will immediately reduce their taxable assets and thereby help reduce any future IHT liability.

Who shouldn’t consider an Immediate Needs Annuity?

Immediate need annuities shouldn’t be considered by those who may qualify for NHS Continuing Health Care or feel where the need for care is only temporary.

They are also NOT SUITABLE for this who care will be fully paid by their Local Authority or who just want to insure against the risk of possible needing care in the future where you need long term care insurance.

How much do Immediate Need Annuities cost? - Immediate Needs Annuity Premiums

Immediate need annuities are all individually priced based on:

  • the benefit amount or income you want it to provide,
  • the options you chose- escalation and/or capital protection but more importantly
  • age and medical history.

Consequently it’s impossible to give you any accurate figures but if you complete our quote request form we would be pleased to obtain accurate quotes for you FREE OF CHARGE from all providers.

If, however, you just want an idea, one provider Just has provided us with some idea as to what typical Immediate Need Annuity premiums MIGHT BE to provide £20,000 for different ages.

  Escalation 0% Escalation 5%
Age Residential Nursing Residential Nursing
75 £107,103 £100,486 £126,196 £117,513
80 £99,144 £91,882 £114,687 £105,434
85 £89,960 £83,225 £101,893 £93,558
90 £74,389 £70,399 £81,813 £77,216
95 £63,014 £56,361 £67,993 £60,467

Source: Just Adviser website April 2023

Please remember these are only just examples provided by just one provider, actual premiums will differ quite significantly with and other insurers may offer significantly different premiums –which may be substantially cheaper than these.

How do I get an Immediate Needs Annuity Quote?

As an immediate needs annuity might not be suitable for some people, insurers will not provide quotes directly to the public and will only provide annuity quotes to a financial adviser who is specifically trained and qualified to give care fees advice, such as ourselves.

Allow us to search the entire market for you.

We would be happy to initially obtain ALL providers quotes for you absolutely FREE OF CHARGE and without commitment. To request your quotes simply click below and provide your details.


Or speak to an expert now – Call free on 0800 180 4336


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