If you or a loved one needs elderly care, then there can be no doubt that you could be facing some very high ongoing costs. You might also need guidance on how the whole social care system works and how best to meet the fees involved with later life care.
The following information is provided by one of Autumna's trusted partners, Eldercare Solutions. Eldercare Solutions is an independent organisation founded to simplify the maze of options and choices available to people who have to fund their own elderly care.
Eldercare Solutions is a SOLLA (Society of Later Life Advisers) accredited care fees adviser. The information presented here, is of course generic, so you may find a conversation about your specific situation to be more helpful.
You can get in touch with Eldercare Solutions by calling them on 0800 082 1155, or by clicking here.
Social care in the UK is means tested. If your assets are below the means test limit then you may be entitled to some funding from your Local Authority. If your assets are above the means test limit then you will have to meet the cost of any personal care yourself.
The means test limits do differ around the UK:
N. Ireland: £23,250
Even if you are paying for your own elderly care, then you may still be entitled to one or more State benefits.
There is a lower rate, currently £59.70 per week, for those who need help during the day or the night and a higher rate, currently £89.15 per week, for those needing help during both the day and the night.
You can request a claim form by calling 0800 731 0122. Payments will usually stop if you cease to be a self-funder. The system is different in Scotland.
You may even qualify for NHS Continuing Healthcare which is where all the care costs are paid for by the NHS.
To qualify for the latter, you would generally need to have a complex medical condition that is unpredictable, unstable and needs specialised nursing support.
The weekly amounts payable for the FNC are currently £183.92 in England, £80 in Scotland, £148.01 in Wales and £100 in N. Ireland.
There are other scenarios when the property value is not included so do take advice from Eldercare Solutions about this.
During these 12 weeks, the Local Authority will make a contribution towards your care costs although you will still be expected to contribute some of your income.
Anything that they contribute does not have to be repaid.
Once the 12-week period has ended, you can ask for the Local Authority to lend you what you need to pay your care fees.
This is called a Deferred Payment Agreement (DPA) and can be very useful if you don’t want to sell your property – perhaps preferring to rent it out – or if it’s going to take some time to sell and you don’t have other savings to use.
Eldercare Solutions can give you more advice about how this scheme works.
Please be aware that Equity Release products are not normally made available to individuals moving into Care Homes because the property on which they lend has to be owner-occupied. This can, however, be an option for funding care at home.
The first thing to do is work out what the ‘shortfall’ is going to be between your annual care costs and the income that you receive each year. An Eldercare Solutions adviser can help you with this calculation if you are not sure exactly what to include.
At its most simple level, you can then divide this shortfall into the total value of your assets. For example:
Care costs £60,000 per year
Pensions & Attendance Allowance is £25,000 per year
Shortfall is £35,000 per year
Property sale proceeds/savings £175,000
So, £175,000/£35,000 = 5 years.
It would, however, be prudent to expect care costs to increase each year although this could partly be offset by interest on the savings as they are drawn down from, so the money may not last quite as long as 5 years.
We can help you with these calculations and forecasts.
In this example, the £175,000 could be held in cash deposits or other low risk investments but, in the event of 4 or 5 years spent in care, the money will all be gone.
Even with a larger capital sum, this ‘pay as you go’ approach carries risk in the event of longevity.
For anyone worried about their money running out or for those wanting to ‘ring-fence’ and protect an inheritance for their beneficiaries, a Care Fees Annuity could be worth consideration.
These are plans which have been specifically designed to take into account a person’s age and state of health so the income is much higher than you would get from a standard pension annuity.
The principle is that you pay a one-off lump sum to an Insurance Company and in return they pay a guaranteed, lifetime income which is tax-free if paid to a registered Care Provider.
The risk is that money paid could be lost if care is not needed for as long as the Insurance Company had predicted.
There are ways to reduce this potential loss, however, and an Eldercare Solutions adviser can explain these options to you.
These plans can’t be purchased in advance of care being needed but if you are looking for a ‘guide price’ then we have about 15 years’ worth of quote data so, as long as you can tell us the person’s age and the likely ‘shortfall’ (i.e. income requirement) then we can give you this.
If the guide price seems affordable and of interest then we can send you a ‘quote request pack’ which will authorise us to approach all Insurers offering Care Fees Annuities, on your behalf, to obtain binding, underwritten quotes. There is no charge for us doing this.
"...you pay a one-off lump sum to an Insurance Company and in return they pay a guaranteed, lifetime income..."
If you need to know more, Eldercare Solutions will carry out a no-cost, no-obligation telephone consultation to ascertain what options you have for meeting your on-going elderly care costs.
Eldercare Solutions can get quotes for you from all Insurance Companies offering this product. These are AVIVA, JUST, Legal & General and National Friendly. Eldercare Solutions is currently the only advisory firm in the UK with access to National Friendly’s quotes. You cannot get quotes directly from any of the Insurers themselves.
We hope that this brief look into the topic of paying for care has been helpful but if you would like more information, there is a downloadable guide called ‘Paying for Care – Important Things You Should Know’ on our website. Or, if you would prefer to have a copy posted to you, just call us to request this 0800 082 1155.
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