SEARCH, INDEX, UPDATES, CONTENTS, IDEAS, LONG TERM CARE
The need for care
Approximately 1 in 5 men and 1 in 3 women eventually need long term residential care. The average life expectancy for men in residential care is 2 years, but up to 10 years for women.
Funding your own care
Care costs vary across the country but the following can be taken as guide figures -
| Home help - | £7 per hour |
| Nursing Care - | £10 per hour |
| Residential Care Home - | £200 to £260 per week |
| Nursing Home - | £300 to £650 per week |
Being able to fund your own care does give you choice in the care provided and location of residential care.
For many people Long Term Care insurance should be considered with advice from an Independent Financial Adviser (IFA) conversant with this specialist area. The Care Funding Bureau and the Nursing Homes Fees Agency (NHFA) are IFAs which claim to specialise in this area.
There are policies which can be taken out before care is needed and these can be funded by a lump sum or monthly payments.
There are also policies that can be bought at the time care is needed. It is important to obtain accurate information about other assistance with care funding, to calculate ongoing income from state and private pensions, and to determine the likely shortfall of income over cost for a number of years. Many people assume that by this stage it is too late to buy insurance, but it is possible to buy a plan which will guarantee a lifetime income to meet the shortfall in exchange for a capital sum.
The single insurance premium will be based on the life expectancy of the individual. In reality the insurance is against living longer than the average, but it can give comfort by quantifying care costs and consequently protecting any remaining capital available as an inheritance.
As an example a woman aged 82 might have a shortfall of income of £7,000. That would probably be funded by a single payment of £30,000.
Selling your house
An emotive area for many people is the need to sell a house and spend the capital which they had hoped to pass on as an inheritance. We can advise on beneficial advance planning on this aspect, simply giving away assets does not reduce the contribution required. The 7 year rule on gifts for Inheritance Tax does not apply to care funding - there is no time limit to gifts after which they will be disregarded.
Help with funding
Anyone with capital assets of less than £10,000 will generally have their care funded by the state. There is partial support for those with assets between £10,000 and £16,000/£18,500, but no long term state funding for those with assets above £16,000/£18,500 until those assets have been depleted.
There are two distinct sources of funding for care help. It is important to take specialist advice as to which is appropriate for each individual. It has been reported that some people are not made aware of the options.
The most commonly used funding is the local authority Social Services Department. They will provide funding provided assets are below £18,500 and their assessment of need confirms residential or nursing care is required. In certain circumstances the value of property may be excluded from their calculation of capital.
The Benefits Agency can also provide funding as a top up to income to a maximum total of £252.28 per week outside Greater London. This may be payable if an individual qualifies for Attendance Allowance. The limit on capital is £16,000.
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