Daily Mirror (Northern Ireland)
How will you afford care home fees?
As cost of looking after elderly soars to £33,000 a year...
Care home costs have shot up by 25% in the past five years to hit an average £33,094 per year, the Mirror reported yesterday.
At the same time, pensions have stagnated at an average of £14,522, which would pay for five months of care and leave a £19,382 shortfall in the annual funding needed.
The average stay in a residential home lasts 30 months, so it leaves many families struggling.
But is there any help out there and who is entitled to it?
Here, we answer your questions on the care funding crisis: in your home it does not count towards the value of your assets for means testing and you won’t need to sell it. get if you actually moved into a care home. usually have to make monthly repayments on the loan, it means the debt can soon build up.
Releasing a lump sum can also affect your entitlement to state benefits, so you must speak to an independent financial adviser to ensure you fully understand the impact it will have on finances.
You could also consider a deferred payment agreement, which is an arrangement with the local authority that lets people use the value of their home to help pay care home costs. If you are eligible, the council will help pay your care home bills and you can delay repaying the council until you choose to sell your home, or until after your death.
Many local authorities set a limit of between 70% and 80% of the value of the property.
If you have money in ISAS or the bank you could consider buying an immediate needs annuity. This is a type of insurance policy that provides a regular income in return for an up-front lump sum. The income is tax free if paid direct to a care provider.
But you need to thoroughly check this out before you buy as there are risks. You will have to hand over a large sum of money that might cover, say, four years of care home fees. If you live for many years longer then this could be good value, but if you die quite soon, your family would not get any of your money back.
a will in place and setting up Power of Attorney over your finances and healthcare can save lots of heartache.
It means if you take a turn for the worse your family will be able to sort everything out much more quickly and without having to deal with masses of red tape.
If you have savings and assets it can be worth getting advice from a lawyer to find out about the possibility of putting things into trust for your children.
Although this needs to be done when you are fit and healthy – and with caution.
If a council thinks you have deliberately transferred, say, the ownership of your home to your children to avoid paying care fees t h e y wi l l c h a l l e n g e this as “deliberate deprivation”.
In this case any trusts you had set up would be ignored.