Care Fees and Later Life Planning
Care Fees Planning
The vast majority of people who have to meet their own care costs are unlikely to be able to do this without using up at least some of their assets, which does not always offer the peace of mind that many are looking for, especially as there is no guarantee of an inheritance being left for the family.
We can advise you on planning for care fees, answering your questions and if you need a care fees annuity then we are here to help arrange that too.
Will I have to pay care home fees myself?
Very broadly speaking, if you have assets above £23,250* then you will be classed as a self-funder which means that you will have to cover any care costs in full yourself. You can still claim Attendance Allowance and you may also be offered some financial support by your Local Authority if your property is your main asset.
If your assets are under this limit, bearing in mind that a property is not included if a spouse or relative over the age of 60 lives there, you may qualify for Local Authority funding.
*April 2019/2020 for England and Northern Ireland. In Wales, the limit is £50,000Having to make difficult decisions about paying for care?
Confused about who pays for what?
If you are interested in finding out about how much care costs, please fill in the contact form
The vast majority of people who have to meet their own care costs are unlikely to be able to do this without using up at least some of their assets. The most common approach for funding any ‘shortfall’ between existing income and care costs tends to be to simply draw down what is needed each month from savings, and perhaps property sale proceeds, and hope that these do not run out completely.
Unless you have a very significant amount of capital (relative to the income you need) or you take a very high risk investment strategy that happens to pay off, capital depletion will be unavoidable. This does not always offer the peace of mind that many are looking for, especially as there is no guarantee of an inheritance being left for the family.
There is, however, an alternative to meeting care costs from capital on an open-ended basis, called an immediate or deferred care fees annuity. It will pay out a guaranteed, tax-free income for life. This is not the same as a pension annuity which would offer a much lower and taxable income and does not take into account the age and state of health of the individual.
The very first stage of our care journey will assess the likelihood of the annuity being an appropriate solution for your needs – and if it isn’t, we will tell you!
Hasn’t the Government changed the rules?
The Care Act 2014 had paved the way for the introduction of a £72,000 cap on care costs, to take effect from April 2016. This was then postponed to April 2020, but the government has since confirmed that the implementation of this cap would not be happening in 2020 after all.
Self-funders can still cap their own care costs by purchasing an immediate or deferred care fees annuity if affordable and appropriate.
What happens next if I think I qualify for Local Authority funding?
You will first need to undergo a care needs assessment and you should request this from the Adult Care Services within your Local Authority. If you meet their eligibility criteria then a financial assessment will be done and this will calculate how much they will contribute. Most of your income will be taken into account and each Authority has a maximum amount that they will pay.
Not all Care Homes will accept Local Authority funded placements as the amount paid is typically much lower than their private fees. A top-up could therefore be requested by some Homes.
Will the NHS pay?
Yes, that is correct if you are assessed by the NHS as having a “primary health need” which is likely to be a complex medical condition that requires substantial ongoing healthcare. In these cases, regardless of the assets you have, the NHS will either pay for your care in full (this is known as ‘NHS Continuing Healthcare’) or they will at least pay a fixed weekly amount towards it.
The Care Home that you live in must be registered as a ‘Care Home with Nursing’ for you to be eligible for any amount of financial support from the NHS. You can check what type of care a particular Home is registered to provide by looking on their regulator’s website.
You may be eligible for NHS funding even if you are receiving care in your own home, provided you meet the criteria that they set.
Can’t I just give my assets away before I need care?
Of course you are free to do what you like with your assets but if you then ask the Local Authority to fund your care and they believe that you have given away assets for the sole reason of protecting them from care costs, they can simply refuse to pay for you. This action is referred to as ‘deliberate deprivation’ of assets and there is no time limit beyond which they would ignore such transfers.
Do I have to sell my house if I move into care?
It is important to be aware that if your spouse or a relative over 60 lives in the property (as their main residence) then its value is excluded from the Local Authority means-test.
If a move into care means that your house is left vacant you do not necessarily have to sell it. If your other assets are less than the £23,250 capital limit you can apply for a loan from your Local Authority. This only usually works as a solution if the loan is for the full cost of care rather than just the ‘standard contribution’ that a Local Authority might pay.
Who will make decisions for me in the future if I am unable to?
Arranging a Lasting Power of Attorney is the only way to ensure your loved ones, or someone you trust, can handle your affairs if you can no longer do so.
If you become incapable of making decisions for yourself and you do not have a Lasting or Enduring Power of Attorney in place, an application would need to be made to the Court of Protection by your representative to become your Deputy in order for them to be able to act on your behalf.
Chestnut's Ian Francis is an associate member of the Society of Later Life Advisers. SOLLA helps people and their families in finding trusted accredited financial advisers who understand financial needs in later life. A well-qualified financial adviser like Ian is also somebody who understands the plans you need to make for your retirement years. He is well qualified, independent expert, which means that we can answer all your questions and obtain all available care fees annuity quotes for you.
The annuity Providers have to offer the same prices to all financial advisers with the only variable being the adviser’s charge which you agree at outset. We are, in effect, doing the shopping around for you.
Estate Planning Advice
We regularly advise clients on how to protect their estate to plan minimising potential inheritance tax liabilities, to pass wealth through your family, using gifts, insurance policies, Wills and trusts.
Many clients ask us for help to create their lasting powers of attorney (and the use of enduring powers of attorney), to help them get the best of out of life by appointing attorney's to look after their best interests concerning their property and assets, or to be consulted if your health fails.
Both Ian and Emma are qualified through the Society of Will Writers to help clients with writing Wills and trusts.
Reviewing your plans and options, and those of your family & loved ones, giving reassurance about such decisions.
The value of care fees planning, pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
Please feel free to choose from this list of more detailed pages where you would like more information.
Knowledge and expertise
Care fees, later life and estate planning is much more complex than we’re able to explain here. Rest assured, we use our skills and expertise to stay up-to-date with current thinking, changing legislation and new products to ensure you receive only the highest quality advice.
Please Get In Touch
Please feel free to look through our services, listed under "What We Do" above. We welcome calls (our number is 01522 788887) and emails (email@example.com) to see if we can help you. Or please complete this contact form and we will get back to you as soon as possible!
The value of pension and investments and the income they produce can fall as well as rise. You may get back less than you invested.
Estate planning is not regulated by the Financial Conduct Authority.