Everything You Need To Know
- Long Term Care is a peculiarly Western thing.
- Care is expensive. Age UK, average weekly cost of a care home in the UK is £800 (£41,600 per year). For a nursing home, average of £1,078 per week (£56,056 per year).
- How much of a problem is it really?. ONS average life expectancy at age 85 is 3.6 years for females and 2.6 years for males. If you’re aged 85, you have a 15% chance of needing full time residential care.
Everything You Need To Do
- Try to identify the possible cost of Long Term Care. Impossible to know for sure, but if you figure on £50,000 a year per person, then that’s a start. Generally would allow for one partner for a maximum of four years. 4x £50k is £200,000.
- Decide your priority. What’s your priority – your own comfort or an inheritance for the family?
- Can you set aside the money? Generally the cost of care rises well ahead of general inflation, so you’re going to need a high allocation to equities.
- Remember your home. If the role of your home is a last resort mechanism for paying for care, then that’s not a bad outcome. We’ve had clients equity release to pay for care IN the home, which has worked well. If in a couple and only one needs care, the remaining partner cannot be kicked out of the house. If your home IS included in the financial assessment, the LA has to offer you a Deferred Payment Agreement.
- Remember – wealth gives you choice. Avoid ‘schemes’ such as Family Protection Trusts (FPT). These are fraught with issues and I’ve seen them challenged. Trusts are costly to set up and run. Require tax returns and registration – only winners of FPTs are the solicitors.
Really, there is little you can do to avoid paying for care if your assets are worth over £23,250. We encourage clients to be sanguine about the need for care and address it as and when it becomes needed, rather than obsess about it ahead of time.
