Paying for care

The cost of care and how it is funded is a subject that in the past people tended to ignore with many adopting an outlook of ‘I will just cross that bridge when/if I come to it’ as they didn’t really think it would affect them.

However, due to medical advances a far greater number of people are requiring care as their bodies are out living their minds and until a cure is found for Alzheimer’s disease and other mentally incapacitating diseases, this situation is only going to be compounded.

The subject of funding for care now frequents the tabloids and quite rightly so as the vast majority of the population will not be able to afford to pay for care using just their retirement income alone and very few have put plans in place to cover the shortfall.

Whilst the state can help with some costs, the reality is that the combined income and assets that the majority of people have will deem them ineligible to claim support.

Currently the statistics show that one in three people will need care, and that the average length of time that the care will be required for is continuing to rise.

From April 2016 there are some changes in the way that people are assessed for and expected to pay care fees. A cap on care costs of £72,000 is being introduced. This is designed to limit the total amount that you will need to pay for care during your lifetime.

However, in order to meet the care fees cap it is going to take the average person 5.7 years and the total cost of care is likely to amount to £178,957. (* Stats from Partnership)
The total care costs are much higher than the cap because:
1. The Government expects you to pay around £12,000 for accommodation regardless of how much a care home charges.
2. The cap only starts to accumulate once your needs have been assessed as being ‘Critical’ or ‘Substantial’.
3. The cap applies to direct care costs and at the local authority rate, so if the care home charges more than that rate, your care costs may be substantially higher. It is worth noting that the majority of care homes charge a higher rate.

Part of our goals based planning process focuses on the future needs and wants of our clients in relation to care should it be required in the future. We not only look at the financial implications of care, but also whether it would be preferred within the home, or alternatively within a residential or nursing home. We calculate the anticipated shortfall and then earmark sufficient capital to cover it using bespoke financial solutions.

We also recommend that everyone speaks to a Solicitor to discuss Lasting Powers of Attorney (LPA’s) as they can be invaluable if capacity is lost.

Finally, if care is forced upon you due to a severe illness such as a stroke, we also have expertise in rearranging assets in a simplified manner to assist with care funding at short notice.

If you would like anymore information regarding any aspect of care fees planning, whether it be for you or a member of your family, then please speak with your adviser at Ludlow and they will be happy to assist you.

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