How we cope with caring for children parents
Many middle-aged people find themselves in the ‘sandwich generation’. Olivia Rudgard offers them some practical help
In Mrs George-Foster’s case, her mother was uncomfortable going into a care home and preferred to stay in her own home, so the family paid privately for carers.
This can be a better option financially. Many older people worry about having to sell their home to pay for care, but if the care takes place at home the property is not taken into account for means testing purposes.
If you go into a care home and have assets of more than £23,250, including any property, you must pay for your own care – and fees are high and growing. If the care takes place at home, the threshold is the same – but the included assets don’t include the house.
An “immediate care annuity”, which pays out a regular amount in exchange for money upfront, can also take some of the uncertainty out of paying for care.
“Use the annuity income to pay the care home directly, as there are income tax breaks,” said Liz Alley, head of financial planning operations at wealth manager Brewin Dolphin. “If the annuity pays out to a person instead, it can be taxed as earned income.”
However, if the person needs a high level of live-in care, costs can quickly mount up to £150,000 a year, and if a local authority is paying, it is likely to want to move the person into a residential home.
This may also be a safer and more comfortable option for someone with complex and serious health issues.
Depending on the needs of the person being cared for, you might also be able to get some help from the NHS. If they need nursing or specialist care they may be eligible for help paying for care through funding options such as continuing health care or NHSfunded nursing care.
Continuing health care funding is available to people being cared for at home or in a care home. It covers all care fees for people who need full-time care for health reasons, including the “board and lodging” element of a care home’s costs. Anyone who has health care needs and needs full-time care should have an assessment for this funding as well as a financial assessment.
Both are carried out by the local authority. People who suffer from dementia can be eligible for this type of funding. Being unable to look after young children because of the demands of caring for a parent can be one of the hardest parts of being in a “sandwich” generation.
Unfortunately, childcare can be extremely expensive, but geographical closeness can make a big difference both to expense and to the ease of juggling caring responsibilities – as can having family members around to help.
For Mrs George-Foster, the juggling act meant that her son moved from private school to the local primary school, which was closer to home. This meant that the couple paid for a tutor for him in the later years of primary school.
This could represent a good compromise for parents unprepared for the extremely high costs of private school but who still want their child to get into the best secondary schools.
Of course, having a nanny, childminder or au pair will take the pressure off – but they don’t come cheap. Annual fees outside London for a part-time nanny can reach £10,000, and a childminder can
cost £5,400 a year.
Being unable to plan for a child’s future can also be one of the most stressful aspects of supporting both parents and children. Research by Brewin Dolphin found that 58pc of parents expected their own wealth to make a significant difference to their children’s living standards. Ms Alley said planning early and in a tax-efficient way was key.
“Use the Junior Isa allowance for them every single year, and Children’s National Savings Bonds,” she said. “Fill every single allowance available for every year before you move on to anything else.”
A Sipp – a self-invested personal pension – can also be set up for a child, and up to £3,600, which includes a contribution from the government in the form of tax relief, can be paid in each year.
If you want to put save more, a trust structure, which keeps the money aside until the child is a certain age or wants to use it for a certain purpose, might be suitable.
The “Bank of Mum & Dad” is now one of Britain’s top mortgage lenders – but younger people are worried that the financial strain of caring for older family members will limit their ability to provide for their children.
Specialist mortgages that allow income to be taken into account without large amounts of money being required upfront might help. Examples include the Barclays Family Springboard mortgage. This allows parents to put a 10pc deposit into a linked savings account. It has to stay there for three years, but isn’t actually paid to the lender.
If the person being cared for loses the ability to look after themselves and their finances, having lasting power of attorney arranged will reduce the time and stress involved.
It needs to be set up while the person is still capable of managing their affairs. It needs to be signed by the “attorney” – the carer – and “donor”, the person to be cared for. It must also be registered with the Office of the Public Guardian, which can cost up to £110, depending on your income.
If this isn’t done, you will need to apply to the Court of Protection for a power of attorney arrangement. This costs £400, plus any legal fees, and an annual fee of up to £320.
The ‘Bank of Mum & Dad’ is now one of Britain’s top mortgage lenders
Lucy George-Foster’s mother was ill while her son was going through school