Don’t let Alzheimer’s steal a loved one’s financial security
Some smart planning can ensure that money is one less thing for sufferers to worry about at a difficult time. Tricia Phillips finds out more
ALMOST a million people in our ageing population have dementia, with around three in five of them suffering from Alzheimer’s.
And that overall number is expected to grow to around 1.6 million by 2050.
Alzheimer’s has a dramatic impact on every aspect of someone’s life. So when someone you love suffers from it, you have to cope with profound changes as it progresses.
Sarah Coles, senior personal finance analyst at investment firm Hargreaves Lansdown, says: “While nothing can prepare you for this process, there are things you can do to cut the damage this disease can do to their finances.”
Here’s what to do:
Act before there are signs
Everyone should draw up a Lasting Power of Attorney (LPA) as early as possible. An LPA lets someone appoint one or more people to make decisions for them, if there’s ever a time when they can’t do this themselves.
Once someone has lost the ability to make and understand decisions, it’s too late to draw one up.
There are two types – one for financial decisions, one for health ones. It’s a good idea to have both. more than one person can be appointed an attorney, and they can either make decisions individually or jointly. You’ll need to fill out and submit a form. Start it online at: lastingpowerofattorney.service. gov.uk/home, then print it out and sign it – along with everyone else listed in the LPA.
Then register it with the Office of the Public Guardian, PO Box 16185, Birmingham, B2 2WH. It costs £82 for each LPA, and can take up to 20 weeks.
If mild symptoms start to show
Alzheimer’s is a progressive disease, so early on, a sufferer may have mild symptoms such as memory lapses about recent events or people in their lives. If you’re confident they can manage their money with support, these steps can help protect them.
■ Help them get finances in order, simplifying as much as possible.
■ Sort the paperwork. make a list of organisations with which they have accounts, along with account and customer numbers. Keep it safe.
■ Set up direct debits for any bills you can. Sufferers can forget paying bills, risking running up debts.
■ Keep an eye on accounts, so you know when you need to step in. Ask them to set up a third-party mandate, so you can monitor and speak to companies on their behalf.
■ Once you have a third-party mandate, ask their bank for a card that lets them spend with their signature, so they don’t have to remember a PIN.
■ Ask them to start a book, noting what they spend, to make it easier for you both to keep track.
■ Look out for tell-tale signs. Unopened bills could mean that debts are building up, while a rise in scam letters or junk mail can indicate they’ve responded to a scammer.
When they can’t manage finances
At this stage, an LPA is worth its weight in gold, as you can take over managing their money.
If you don’t have one, you may need to apply to the Court of Protection for a deputyship order. A court will decide the limit of your powers. It comes with annual fees, and you’ll be supervised by the court, usually having to produce an annual report detailing decisions, along with income and expenses. If you need to make big decisions, it may be the most sensible option.
Even with an LPA or deputyship, people can still face financial issues, so there are other steps worth taking: ■ Set up an account with a fixed sum in it and no debt facility. This helps someone feel they still have some control and can buy without damaging their finances if they make a mistake.
■ Have a ‘safe place’ at home for their cash where they can see it. Sufferers can lose things, causing distress.
■ Get a call blocker and sign up to the telephone and mailing preference services to cut down junk mail and nuisance calls – making it harder for scammers to reach them. ■ Heed warning signs – unexpected parcels, phone calls and letters. Ensure they aren’t making regular payments to anyone.
If they’ve hidden problems for too long
Some sufferers can keep symptoms from loved ones to try not to worry them. It can mean by the time you’ve realised there’s an issue, they’re already in debt.
If so, contact the companies concerned, explain the issue and that they’re vulnerable. Also contact charities such as Age Concern, and Stepchange, which can provide help and template letters to send to creditors. You may be able to get debt cancelled if you can prove the seller knew the person lacked the capacity to make the right choices – difficult to prove, but worth a try.
What if they need care?
Sufferers will increasingly need help with daily life, and often need specialist care. This raises the difficult issue of how to pay for it.
Rules for this now: If someone has complex and difficult medical needs, the NHS may pay. However, don’t assume advanced Alzheimer’s will qualify. You’ll need a health assessment for NHS Continuing Healthcare, which will show they have medical needs, requiring regular intervention from medical professionals.
Otherwise, in England, if someone has assets of less than £14,250,
the council may pay.
It will carry out a needs assessment, and means test. For care at home, or going into a home temporarily, the means test won’t include a home.
A home will be included for going into a care home permanently, unless someone else from a specific list lives there – a partner, children under 18, or a relative who is disabled or over 60.
Someone with assets between £14,250 and £23,250 will have to contribute to their care costs, over £23,250, they’ll foot the entire bill. Rules from October 2023: People with assets up to £100,000 will receive some state help. There will be an £86,000 cap on care costs. However, only money personally spent will count towards the cap – local authority support won’t be included. Any fees paid before next October won’t count towards the cap.
Once the cap is reached, care still won’t be free – accommodation costs set at £200 a week will apply, and top-ups for care beyond the level a council decides is necessary.
Paying for care
Almost half of older people in residential homes pay for their care, which can be incredibly expensive. Costs average £600 a week for a care home, and more than £800 for a nursing home. This can hit £1,000.
Some people will have savings, or pensions to cover care. It’s worth considering an immediate needs annuity, where you pay a lump sum in return for a guaranteed income for life to cover care fees. This protects from the threat of money running out, although you could pay in more than you receive.
Some people use a property to generate income for care bills. Renting can work, but has risks such as lack of constant tenants, repair and maintenance costs, or tenants refusing to pay. Others use equity release but it can be hefty with up-front fees, and interest rolling up over the years. Alternatively, you can enter into a deferred payment agreement with the council, where costs roll up and are paid when a property is sold on death.
Help them get finances in order, simplifying as much as possible
What about carers?
Caring for someone with dementia can mean extra costs for you, but you may be entitled to benefits or financial support.
See alzheimers.org.uk for details.