There will come a point in everyone’s life when we start addressing the need for care or additional support. Whether this is with family or at a dedicated care home, the costs are not cheap, and how much you can afford will depend on your unique circumstances. In this guide, we explore different options for funding later life care, so that people retirement planning in Cheshire or Oswestry can feel as comfortable as possible.
When considering an effective retirement strategy, it is important to take into account different ways of planning care arrangements, as well as the legal implications of trusts, wills and powers of attorney. This is why it is important to be able to access good specialist advice to understand which arrangement works best for you. The key point to remember is that care costs are an integral part of your retirement planning.
Care funding eligibility
In England, anyone considering long-term care options will need to determine if they are eligible for NHS or local authority financial support. Those who are not will be liable for self-funding, which means paying care fees out of their own pocket. https://www.harteywm.co.uk/services/financial-planning
Ordinarily, eligibility will be determined by someone’s care needs and personal wealth. People with capital under £14,250 will be entitled to maximum funding from the NHS or relevant local authority. Those with capital between £14,250 and £23,250 may be entitled to support pending an assessment. Anyone with more than £23,250 is deemed ineligible and is fully responsible for their own health care.
Who currently pays?
In England, around 50% of care home residents (aged 65 or over) pay for care provision privately, whilst the other half receive state support based on an asset assessment. Some of this latter group may still contribute to their costs via top-up payments, whilst others may be entitled to a modest Personal Expenses Allowance. Typically, the annual cost of residential care amounts to £67,496, with people in a nursing home paying £79,820.
How is care funded?
Self-funders will find different ways of paying for residential care. These might include selling or renting out a home, agreeing to a release of equity, or using a Deferred Payment Scheme. There may be situations in which cash is tied up in a property, in which case the relevant local authority will only demand repayment once it has been sold.
The role of pensions, savings and investments
Some people may, alternatively, opt to pay for care home fees using their personal assets such as pension income, rental properties, or any savings or investments in their name. There might include shares, ISAs, saving bonds or National Savings Certificates. In the case of long-term annuities, you might wish to consult a specialist for advice on when to make one-off lump sum payments. Annuities are only purchased through an adviser. This amount might vary depending on your age, health and the amount required. In some instances, they could offer the security of a lifelong fixed income.
Selling your home to fund care provision
Means testing is the process used by the state to assess a property as an asset, by determining its value and marketability. It is potentially considered an asset if a spouse or partner still lives there, or a child under 18 or a relative over 60, disabled or otherwise. This also applies during the first 12 weeks of permanent care or if care is temporary. In the case of a jointly owned property, the local authority will make a calculation based on its current sale value. Should you sell your share of the property, that would be factored into an assessment of your capital.
Wealth protection
There are different ways in which you can protect those assets. There is always the risk of unexpected events or economic turbulence outside your control. This is when you should consider life insurance, income protection, private medical cover, family protection and business protection.
https://www.harteywm.co.uk/chester/estate-planning-cheshire/
When considering care options, it is crucial you seek solid guidance from a reputable financial planner. Call us at Hartey Wealth Management today to set up a tailored consultation.
