Acting now could protect your home and savings should you need care later on

How expert advice can help to negotiate the financial pitfalls of paying care home costs later in life

The decisions made by the UK Government this month about care home fees and how they will be paid has an impact for Scotland.

That’s because care home costs policies have not changed in Scotland and there is no intention to cap what you may have to pay, so the need to protect your home from being sold to meet care home costs has never been greater.

Across the UK, from April 2022, there will be a 1.25% increase in National Insurance contributions. From April 2023, this will become the new Health and Social Care levy and, in England, will go towards capping the total amount an individual can pay towards care home fees (£86,000) – while in Scotland, no cap will come into place.

This means that, here, your home can be sold – and your hard-earned savings used – to pay for your (or your spouse’s) care home fees. Neil Jones, Estate Planner at ILAWS, explained what this means for homeowners in Scotland:“In England they have decided that the NI increase will go towards the NHS and care home fees with a cap on the latter at £86,000 – this means that an individual will still have to pay up to £86,000 for their own care (probably still having to sell their house to do this) but no more than that now.

“Whereas Scotland is not doing that and the local authority will still make you pay for 100% of your care home fees (if your total savings and property are worth more than £28,000). If you have your savings and property is properly protected – or your assets total less than £18,000 – you get your care for free, bearing in mind you have paid your National Insurance all your life for this. If your assets total between £18,000 and £28,000 then you will have to pay for approximately half your care fees until you only have £18,000 left.

“If your assets total above £28,000 (every homeowner, for example) then you have to pay for 100% of your care – again, unless you have taken steps to protect yourself.”

Neil explained that if a couple do not own their property but have £40,000 in savings in a joint bank account, then this

money can be used (down to £28,000) to pay for either one of their care home fees as bank accounts are owned “joint & several” (meaning that each of them own the full £40,000 in the account – not £20,000 each). He added: “Your finances and property are at risk as they will take it from you, so you really need to protect your property.”

Neil and his colleagues at ILAWS are experts in this field. They can look at different property protection options available to you and your spouse, if you have property and/or assets and are worried about them being swallowed up to pay for care home costs.

Neil said: “There are legitimate ways to protect home and savings – in the form of a trust or transfers, for example.And, although there is no ‘one-size fits all’ solution, most of our clients do have options here.”

As well as helping you to protect your property, and investigating the options you may have, ILAWS can also organise two other important documents for you – a Will and a Power of Attorney. Reasons why you should have a Power of Attorney, and name someone you trust to make financial or medical decisions for you, are outlined on the left.

A Will can save the loved ones you leave behind from any stress, expense or a lengthy wait when the time comes and

your property, estate, finances and personal belongings are shared out.

Remember, ILAWS can give advice on protecting your home, writing a Will or arranging a Power of Attorney.

Read on to find out the benefits of having both essential legal documents

from ILAWS’ client Elizabeth Nicholson, on the right.

There are ways to protect home and savings