Chestnut Financial Services

Chestnut Financial Services, Financial Advisers

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Chestnut Financial Services, Financial Advisers
Paying Care Fees advice from Ian Francis
Paying Care Fees advice from Ian Francis, Independent Financial Adviser

Advice on paying care fees

We all hope to enjoy a long and healthy retirement, maintaining our independence. But this is unfortunately not always possible. Whether care is required in your own home or in a residential home, when paying care fees, the cost can quickly erode an individual's wealth.

We are here to guide you through the options available whether you are planning on paying care fees for yourself, acting as an attorney for somebody who is paying care fees, or simply assisting a family member with paying care fees.

Let's start by considering eligibility for free NHS Continuing Healthcare and NHS Funded Nursing Care, local authority support, and key state benefits.

Once we understand the shortfall between what help is available, your current income and assets, and the future cost of care, we can look at what might be the best strategy for your investments and property.

Our aim is always to provide peace of mind during a time when difficult decisions need to be made.

We Answer Your Questions About Paying Care Fees

For example:

  • What help should I be getting from the NHS or Local Authority to pay for care fees?
  • How do I complete the Local Authority financial assessment questionnaire?
  • What are the different ways to pay for care?
  • What if I can't afford care home fees - now or in the future?
  • How do I appeal NHS continuing healthcare (CHC) decisions?
  • Do I have to sell my house to pay for care?
  • What can I do as an Attorney with investments and property?

No matter how seemingly silly or difficult, our aim is to answer your questions and give you confidence about care fees.

Our help for you

Our role as independent financial advisers is simple - help you understand your options and reduce "complexity" into "simplicity".

Paying Care Fees Advice Photo of Ian Francis2
There's always a host of questions you want answers to

There can be a whole host of questions that you, an Attorney, or a Deputy, may have. We can answer concerns over how long the money will last. Each of the ways of paying for care has advantages and disadvantages and their suitability will depend on your situation and what you want to do. The optimum solution might be one or a combination of these options:

Using savings, investments and selling your home

In whatever form - the bank account (which is normally a bad idea), savings accounts, investments, and money from the sale of your home (if that is needed and appropriate). This might be the right solution, especially if it isn't likely to be a long term need for care in a nursing home. It might be a better use of the money than a care needs plan.

For any surplus funds that need to be invested, we strongly recommend talking to us about a suitable investment strategy. We have lots of resources to recommend a suitable range of investments that are low risk and hopefully return income better than current rates of interest from holding the money in the bank. We look at bonds, gilts, money markets and other opportunities, designed to fit around your care fee needs.

Your home may be the best - or an only - asset that you can rely on to pay for care fees over a lengthy period. If equity release or renting isn't an option, then you might want to consider selling it. The money raised from selling your home would then benefit from investing into a suitable strategy to make sure it didn't go down in value unnecessarily and be available to meet your care fee needs at the right times.

Using your home to raise money
Could I rent out my home?

If you are able to use your income then this would stop eating into your capital. However, there aren't many people who can afford to meet the entire cost of care fees simply from their own income.

You could rent out your home to provide an extra income to pay for some, or all, of the costs of care if it is in a good condition. The advantages are that your property would potentially benefit from any increase in value as well as give you an income. The potential disadvantages include difficulties with maintaining the property and tenants, and as a landlord, you would need to consider the safety and other legal requirements for tenants.

This option might cause unintended tax issues, so it would be best to speak with us about your options first.

Equity release

Equity release schemes enable homeowners aged 55 years or older to release some of the value of their property without the need for selling it or moving elsewhere - one use is to pay for your care fees, or to purchase a care fees plan. How much you can release depends on several factors such as your age, health, lifestyle, the kind of equity release plan you choose, and how much your home is worth. The amount borrowed and any interest owing on an equity release policy will need repaying on death or entering a care home permanently.

Retirement interest-only mortgage

The Retirement Interest Only Mortgage is available to people over 55. It's a loan secured against your home. You pay the interest each month, which means the amount you owe doesn't increase over time. You can use it for most purposes (including paying off an existing mortgage). What's more, you don't have to repay the loan until you, or the last remaining borrower, die or move permanently into long-term care.

Paying Care Fees Advice, from Ian Francis, Independent Financial Adviser
Using an immediate care annuity

An immediate care annuity is a type of insurance policy. It generates a guaranteed level of income for life, based on the individual's state of health, and is free of income tax when paid directly to the care provider. It can be bought as soon as the need for care fees arises and, as the name suggests, benefits the recipient immediately. Alternatively, a "deferred needs care fees plan" could be bought which gives more flexibility for those unsure of committing a significant lump sum at an early stage of needing care. This means there is no reason to "run out of money" and your remaining capital is ring-fenced from future care costs.

These care plans will require you to provide details of your health, but unlike other types of insurance, the worse your health is, the lower will be the cost of the plan. The amount of income paid out by the annuity each year can be fixed, or you can choose to have it increase by a fixed percentage, or by the rate of inflation. This is often a good idea as care needs, and costs, are quite likely to rise over time, and if you move care homes, the plan simply moves with you.

Of course, such an annuity will not be the best solution for everyone's individual circumstances.

An example of using an immediate care annuity can be found in our article

Deferred payment arrangement (DPA)

If your assets are below £23,250, the Local Authority may agree that you can enter a DPA, so you do not need to sell your home, but in return, the Local Authority will place a charge on your property and charge you a small amount of interest. It is a loan to pay for the care costs that are repaid when the person's property is sold or dies.

If a DPA is of interest to you, please do get in touch, we would be happy to give advice on its advantages and disadvantages.

Paying Care Fees Advice Photo of Farley the Labrador
A warm welcome from Farley
What's on your mind? Let's talk...

We offer a free, no-obligation, initial telephone consultation for new clients to answer some initial questions and help you with some first steps.

After that, we will then ask if you would like to set aside more time at a good time of day for you, when we can meet in person (with or without Farley), on video, or by phone, whichever is most convenient for you.

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What it means to be SOLLA accredited

Clients requiring financial planning in their later life benefit from advice that is clear and concise. Such advice comes from an adviser that is suitably qualified and experienced to advise them and manage their financial planning.

We have been advising clients on long term care solutions for several years now, backed up not just by professional qualifications but also by the membership of various professional bodies, most notably the;

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What our clients have said

"When my mum came out of the hospital and straight to a care home with dementia, my mind was a whirlwind - making sure she was ok, panicking about money. I didn't know where to get help about who was doing what, why, and how to look after things.

From my first call to Ian I felt a weight had been lifted from my mind. I owe so much to Ian's service, knowing my mum is being looked after and the bills are paid."

Tom, Lincoln

Important Information

Please note that not all care fees advice is regulated by the Financial Conduct Authority

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Chestnut Financial Services Limited

2a Sadler Court, Lincoln, LN6 3RG

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The guidance and/or advice contained within this website is subject to the UK regulatory regime. It is therefore targeted at consumers based in the UK. Chestnut Financial Services Limited. Registered in England no 9918363, 2a Sadler Court, Lincoln, LN6 3RG. Authorised and regulated by the Financial Conduct Authority.