Practical pointers on how to make the best provision for long-term care.
Finding suitable care for yourself, a relative or a friend might seem like a long way off , but for those who have had to do this it can be a lonely and at times an extremely daunting experience. Most people need some good practical advice and help navigating their way around the system.
What happens as we get older and start needing care isn’t something most of us want to think about, and few people get the right kind of advice to help them make the right choices at this time in their life. Bizarrely, we celebrate the fact we are living longer, but put our heads in the sand when it comes to the idea that we might not be living in the greatest of health, even if we see it happening to our older relatives and friends.
However, with the number of people in the UK living with dementia (800,000) expected to double over the next 40 years and most of us living longer than expected, good advice can go a long way.
Get advice and help
Not everyone gets the help and advice they need and from a suitably qualified specialist later life financial adviser, and it’s important to look for someone who is accredited by the Society of Later Life Advisers (SOLLA). This is a not-for-profit organisation that is set up to link older people and their families to get the best possible advice on care funding.
Under current legislation in England, anyone with assets above £23,250 will potentially need to fund part of or all of their care. By taking advice you can find out if you need to pay for your care and what your best options are.
Sadly, most people only seek advice at a crisis point. Instead, it is prudent to plan for future eventualities as early as possible and think about the sort of care you want.
Can you stay in your own home with the support of carers or family? Most people would prefer to stay at home, and with good support from family and carers this may be possible. One funding option may be to look at equity release; again, do take good accredited advice as to what the implications are with regards to this. Being aware just how long your money may last if paying for your own care, and what your options are, are not easy to predict or calculate without advice.
Alternatives to care at home include moving in with family or into residential care. The average cost of a care home in York is £734 a week and in Kensington it can rise to £1,250 a week, so a financial plan needs to be put in place to pay for this. If you have no spouse or partner still living at home, should you sell your home or rent it out to cover the cost? Renting your home will require some thought, given the rules and regulations of becoming a landlord, tax implications and whether the rent will be enough to cover the overall costs.
It may be possible to arrange alternative solutions to ensure that care fees can be paid indefinitely without the worry of running out of money. For example, Immediate Care Plans are dedicated tax-efficient arrangements making use of an annuity that pays an income for the rest of your life. They are designed to cover all or part of someone’s care fees and can bring both some certainty and peace of mind that future costs will be covered.
Other things to consider
Appoint others to help you with making decisions in the event that you become unable to do so. Arrange for lasting power of attorneys, both financial and health and welfare, while you still have capacity – it is so important to be able choose the best people to manage your affairs in case of accident or illness. Without these arrangements, the court of protection will appoint the individuals to make decisions for you.
Also bear in mind that many people paying for their own care are eligible for some non means-tested benefits, such as the attendance allowance. Eligibility for this valuable benefit depends on your situation rather than your finances, and there is help available to claim it.
Fully funded care from the NHS is available for those who are eligible; again it is not means-tested, but the bar for eligibility criteria is set high and it tends to be primarily for those needing end of life care.
Michael Oglesby is a director and specialist later life financial planner at Ardent.