Throughout the course of a day we meet clients who are concerned about the prospect of spending their life savings on paying for their care in their old age thus leaving little or no inheritance for their families.
Even though leaving an inheritance may not be a priority to many the questions of how they are to fund their care without being a burden on their family need to be addressed.
Making the decision to move into a care home is difficult. But one in three women and one in four men will require some form of long term care at some stage in their life.
The average cost of care in a residential home is about £25,000 a year, while the annual fees for nursing home care average about £35,000 each year.
If a local authority agrees that care is required, they will assess the physical needs of the individual to determine the type of care that is appropriate. The ability to pay for that care is then assessed to establish the contributions the individual will be liable for. This is based on a means test and it is rare that there is no contribution to pay. The State will only pay for the very poorest people.
If there is a shortfall of funds to pay for the required care then this must be met from your assets. There are various options to meet these fees, which can often include renting or selling the home, cash deposits, purchasing an impaired life annuity, constructing an investment portfolio, pre-funding, regular premium contracts and the purchase of a deferred annuity. Specialist advice is essential before taking steps to follow any of these options.
It seems there is no end to the extent to which local authorities can access assets. Even though the Government recently published a Green Paper proposing several funding options, the position still remains uncertain. It is however clear that the State cannot afford to bear the nation’s care costs making it increasingly important for our expanding ageing population to seek expert legal and financial advice.
We can rarely offer quick fixes. However, we are happy to discuss what best suits your needs and circumstances and help to find a solution.
By wills and probate solicitor, Jill Rushton