How we cope with car­ing for chil­dren par­ents

The Daily Telegraph - Your Money - - YOUR MONEY -

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

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