How could care fees affect me and my loved ones?
With rising life expectancy, increasing numbers of people are requiring long-term care at some point during their lives. In 2021, the average cost of residential care was £2816 per month, rising to almost £3552 nursing care*.
Over a third of care home beds occupied in England between 2019 and 2020 were self-funded, rising to over 50% in the least deprived areas**.
Currently, if you have assets over the upper limit of £23,250 (including property, cash savings, stocks and shares) you are likely to be expected to pay the full cost of your care fees. If you have less than the upper limit, or when your savings drop to this limit, your local authority will assess your ability to pay based on both your capital and income.
From October 2023, the government intends to introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care over their lifetime. However, the cap does not include any ‘top ups’ for premium level accommodation and care that individuals or relatives choose. Further guidance will be published in Spring 2022***.
Why do I need to plan for care fees now?
Planning your finances provides peace of mind. It means you and your family avoid having to sort out the complexities at a time when you are all dealing with a serious family illness.
Alternatively, you may already be considering financially supporting a loved one to afford more suitable care by making top-up or third-party payments. Or you may have recently acquired Power of Attorney for a loved one and be planning on their behalf.
You may have heard about annuity policies for long term care and would like support to identify the best options for you and your family.
By planning for care fees now, you can ensure you are making the best decisions for you and your family.
Hallidays provided financial planning advice to the daughter of a lady requiring a care home. The mother owned a house worth approximately £350,000 and savings of around £150,000. She also had a pension income from herself and her late husband. For her preferred care home she needed to top-up the fee by paying around £500 per week. With Hallidays advice and support:
- Income was maximised - the daughter started to claim Attendance Allowance at the highest providing approximately £70 per week additional income
- An Immediate Needs Annuity was purchased – although this cost just over £90,000 the regular payments ensure all her care home fees are paid in full for the rest of her life and upon her death the family home and £60,000 savings will be passed to her family as her legacy
- Six years later, the mother continues to live in the care home of her choice and the family have peace of mind. Without the annuity her savings would have now depleted on the care home fees and her family home would need to be sold to fund her care.
How Hallidays can help
Our Wealth Management Team is fully qualified to support you to:
- Maximise your income by reviewing your finances and ensuring you are claiming all the benefits you are entitled to.
- Understand all the options available to fund the care fees, ensuring you find the best option for you and your family.
- Arrange an immediate needs annuity – this product purchased with a lump sum which then provides an income which, if paid directly to the care home, is tax free and is index linked to keep up with inflation. This ensures that care fee costs are capped and the remaining assets are preserved for the family.
Hallidays also have a technical team to support you with:
- Wills and Estate Planning – Writing a will can take less than an hour and we can discuss it with you by telephone or in the comfort of your own home if you prefer.
- Lifecycle Review – take a holistic look at your finances for a clear overview of how your income and expenditure, assets and liabilities, pensions and investments are likely to impact on you and your family over the next 5-10 years
Please contact us on 0161 476 8276 or email@example.com if you would like any support.
* - https://www.carehome.co.uk/advice/care-home-fees-and-costs-how-much-do-you-pay
** - Office for National Statistics – Care homes and estimating the self-funding population, England:2019 to 2020
*** - https://www.gov.uk/government/publications/build-back-better-our-plan-for-health-and-social-care/adult-social-care-charging-reform-further-details