Care Fee Planning
This website carries a summary of information on this area of financial planning, however for more detailed information please see our other websites at:
www.carefeeplanningnorfolk.co.uk and www.carefeeplanningsuffolk.co.uk
With higher life expectancy and ongoing improvements in healthcare, larger numbers of us are likely to require some kind of care at some stage during our lifetimes.
The average cost of care in a UK residential care home in 2012 was £519 per week*. Meeting these costs is a challenge for anyone, particularly if reliant on pension income.
Getting good independent advice at the time you make choices about care is essential. Our specialist advisers are highly qualified to give advice in this area and hold the prestigious SOLLA (Society of Later Life Advisers) accreditation. For further information see: www.societyoflaterlifeadvisers.co.uk.
Types of Care
There are two distinct types of care available to those in need of help: nursing care and personal care. Both types of care can be delivered either in the person’s own home (domiciliary care), or in a care home (residential care).
Any nursing care provided in a care home will be funded by the NHS via the Nursing Care Contribution, but this is not available where nursing care is provided at home.
State Help with Care Fees
Individuals needing care may be able to claim State Benefits such as the Attendance Allowance, Carer’s Allowance or Disability Living Allowance. In addition to this, Local Authority funding is means tested – ie it is available to individuals with assets and income levels below the thresholds set annually. Those with savings and/or income above the thresholds will be required to fund their own care until their wealth has diminished to that level. Full details of the current levels can be found in our guide.
Private Funding for Care
A specially designed annuity, an Immediate Care Plan, is available to those who are looking to provide a top-up to their income levels to meet the cost of care. The Plan is purchased with a one-off payment and guarantees a life-time income to cover care fees, free of tax. The cost of the Plan varies according to factors such as the age and health of the individual.
Many will look to the value of their property to fund the cost of care when living at home is no longer an option. There are a range of alternatives to an outright sale which the family may wish to consider: equity release (equity release page) arrangements may provide a solution in some cases. We have a number of equity release specialists who will ensure that any arrangement considered follows the SHIP (Safe Home Income Plans) code of practice, and is in the best interests for all concerned.
Deliberate Asset Deprivation
If you have assets above the threshold for state help with your care fees, you may be tempted to give these away to family members as gifts prior to or during your care. Under funding rules, this is not permitted and the Local Authority involved has the power to include the gifted assets in their means testing process.
With the recent publication of the Dilnot Commission’s report, the Government is contemplating major changes to the way care is funded. However these changes are not likely to happen in the near future, particularly as we pass through the current recession. Our advisers will monitor the proposals as they develop and will advise clients accordingly.
If you would like to explore the care fee planning options available to you, Contact us us for a free initial discussion.
Source: * Lang & Buisson Care of Elderly People UK Market Survey 2012-13