Meeting the cost of residential and nursing care in old age is a growing issue for many people in the UK. As life expectancy continues to lengthen, more of us can expect to require some form of longer term care.
Long-term care costs are high and industry trends suggest fees will continue to rise as people are increasingly living longer.
Potential later life care could cost anywhere between £250 and £900 per weekdepending on whether you are home based or in a care facility, the level of medical support, the location and of course that makes no allowance for items such as costs of clothing, toiletries, personal items and entertainment.
How can I pay for care?
The State may offer assistance with some care funding depending on your overall financial situation but any balance will need to be covered by any of the following:
Own income – You may receive sufficient income from pensions and existing savings and investments or rental income from your home to pay for your care.
Savings Accounts – This includes deposit accounts, ISAs and National Savings.
Very low risk but, as a result, you will have to hope that interest is sufficient and that your capital isn’t eroded too quickly
Long Term Care Plans – These are specialist insurance plans which, in return for a one-off lump sum payment, pay a guaranteed income for life. If income is paid direct to the care provider, it could be paid tax free depending on the rules at the time.
The main benefit of a Care Plan is that it can provide the reassurance of payments for life. This must be balanced against the risk that if the person in care dies early, the capital used to buy the annuity may not be returned – unless additional Capital Protection Insurance is purchased.
Estate Planning and Lasting Power of Attorney
What is a Lasting Power of Attorney?
How to give others the legal power to make decisions on your behalf
Setting up a lasting power of attorney (LPA) gives someone authority to handle another person’s affairs if they are mentally or physically unable to do so themselves.
The Lasting Power of Attorney was introduced in 2007 to replace Enduring Power of Attorney (EPA). The key difference is that EPAs are not registered and did not cover personal welfare. It is possible to register an EPA provided it was signed before 1 October 2007 and to set up a Personal Welfare LPA to run alongside it.
An LPA is easy to set up. Without an LPA, even close family members may not have the authority to make decisions about your care in old age, your financial welfare – or your assets. Never assume a person will be able to act for you simply because they are an immediate family member.
For more information please CLICK HERE.