Plan­ning ahead for care home costs

The Wokingham Paper - - BUSINESS - TIM EMBLETON

WE’RE ALL liv­ing much longer and more ac­tive lives, but an ag­ing pop­u­la­tion means many of us will even­tu­ally need some form of care, of­ten in a res­i­den­tial home. Ac­cord­ing to the most re­cent fig­ures avail­able from the O ce for Na­tional Statis­tics (ONS), some 291,000 peo­ple aged 65 and over were liv­ing in care homes in Eng­land and Wales in 2011. In this part of the world this type of care can be hugely ex­pen­sive – any­where be­tween £50-60,000 a year is the norm now – and comes with the added un­cer­tainty of not know­ing how long you’re go­ing to live. Did you know that the chances of a per­son dy­ing in the first 12 months of go­ing into a care home are about 10%, which hap­pens to be the same as sur­viv­ing for eight years? This isn’t a very cheery statis­tic, but it un­der­lines the stark re­al­ity of fund­ing your care and the dilemma of how you’re go­ing to pay for it. You need to ask: “Will I need £50,000 or £400,000, ig­nor­ing in­fla­tion, to cover the cost?” In my view go­ing into a care home and start­ing to pay that amount of money with­out tak­ing fi­nan­cial ad­vice is just nuts. It’s a huge fi­nan­cial de­ci­sion to make and you’re po­ten­tially in your mid-80s. How­ever, there is a way you can ad­dress this un­cer­tainty by pur­chas­ing what’s known as an im­me­di­ate care plan, also known as an im­me­di­ate needs an­nu­ity, which is taken out at the point of re­quir­ing care. Each pol­icy is in­di­vid­u­ally un­der­writ­ten to es­tab­lish the cost and once in place pays the di er­ence be­tween your in­come and the amount of money you need for care fees for the rest of your life. What you’re do­ing is squar­ing away your fu­ture li­a­bil­ity by party with a lump sum now. Ob­vi­ously, you could die to­mor­row, and that money is gone for good, but equally you might live for eight years or longer. Our key mes­sage to peo­ple who find them­selves fac­ing the prospect of pri­vately fund­ing their care is that you should at least get a quote for such a pol­icy. Un­til you’ve done this it’s di cult to de­cide whether you should buy such a pol­icy or take the risk and pay the care fees as you go along. At Time Fi­nan­cial Plan­ning we charge a fixed fee for pro­duc­ing a re­port which de­tails what we think is the best way for you to fund your care. We’ll give you a range of quotes to help you de­cide. It may be that you want one that es­ca­lates by the in­fla­tion rate or per­haps one that builds in some form of pro­tec­tion so that if you die sooner than ex­pected your es­tate gets a re­fund or par­tial re­fund. One of the prob­lems that I en­counter time and time again is that care homes and lo­cal au­thor­i­ties don’t sign­post peo­ple to­wards fi­nan­cial ad­vis­ers at ex­actly the time they need pro­fes­sional ad­vice. They sim­ply say: “No, you’ve got more as­sets than the meanstested thresh­old so you’re on your own sun­shine, you’ve got to pay it your­self.” So, it’s no won­der peo­ple are wor­ried about run­ning out of money be­cause they never get told to talk to a fi­nan­cial ad­viser who’s qual­i­fied in this area. If you’d like to dis­cuss this, or any of your fi­nan­cial needs, please con­tact Tim Embleton on 0118 327 9895 or email: info@tfp.lim­ited

Time Fi­nan­cial Plan­ning Lim­ited is an ap­pointed rep­re­sen­ta­tive of The On-Line Part­ner­ship Lim­ited which is autho­rised and reg­u­lated by the Fi­nan­cial Con­duct Au­thor­ity.

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