The medical advances that mean that we are all living longer come with a sting in the tail. The extra years may come at the cost of physical and mental frailty. We may need care in our old age.
This could mean a carer or personal assistant to support you so that you can live as independently as possible in your own home, or moving into care facility, where you can be supported 24 hours a day.
But whatever care you need, it will be costly.
According to Age UK, costs average around £600 a week for a care home place and over £800 a week for a place in a nursing home. They will vary across the country, and depend on the quality of the care home.
Will the state fund your care?
We still expect a lot from the welfare state, and in fact someone with less than £23,250 in savings or property equity can get their local authority to pay some of their fees. However, the council cover costs only up to a set limit and increasing demands on their resources means that they cannot afford to be generous. Your local authority (or Health and Social Care Trust in Northern Ireland) will first carry out a care needs assessment to find out what support you need. Once they have determined the care you need, they might pay for all of it, part of it or nothing at all.
Under current rules, any patient with major health problems such as dementia or Parkinson’s should have care and nursing fees paid in full. If the NHS decides that care is required simply because you are frail or elderly, it falls under social care, which is means tested.
Your contribution to the cost of your care is decided following a financial means test. They will look at your pensions, benefits or earnings. Your capital will be taken into account, but if you own your own home and still live there, its value isn’t included in the means test, but it will be if you move permanently into a care home.
Being at the mercy of the local authority at a time when you are feeling increasingly vulnerable is not a very appealing prospect. A home that you feel comfortable in, and which can offer some luxury could be available, if you have sufficient funds. But can you arrange the funds you need, and still have funds to enjoy an active retirement while you are still fit – and have something to pass on to the next generation?
At Continuum, we believe that you can.
What can you do?
There are several ways that we can help you to provide for care home costs.
If you have a sufficiently large pension, it will continue to be paid, and together with income from investments, you may be able to cover the costs without digging in to your capital. We can look at the potential of your existing financial arrangements.
However, most people will not be in this fortunate position.
You should consider the fact the value of an investment and income from it can go down as well as up in line with investment market fluctuations and is not guaranteed, your capital is at risk.
Other solutions exist. One is to buy an immediate needs annuity to provide a guaranteed regular income in exchange for an upfront lump sum. How much you pay initially will depend on your age, life expectancy and the cost of your care – but it may not always be the best solution. Your family will not get any money back from an annuity if you stop needing care earlier than expected.
For most people worried about their future care, the best answer may be to talk to a Continuum adviser. Our specialist long term care planning team can look at your financial situation,and work out ways to make the level of care you may want affordable.
With care costs currently increasing their expertise could be vital, and the sooner you call, the easier it might be to find the answers you need – and real peace of mind about the future.
Call us now for the help you need.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable Long Term Care strategy, you should seek independent financial advice before embarking on any course of action.
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