To have the choice of who makes your long-term care decisions, it is vital that a Lasting Powers of Attorney is in place. This will preferably be with younger attorneys, who will not themselves be old when you go into care. If you already have attorneys in place, have you discussed your preferences with them? If not, why not?
How likely am I to need long term care?
The probability of needing long-term care is increasing. There are approximately 410,000 people receiving long-term care in the UK, of whom 167,000 (41%) are fully self-funding. Dementia-related deaths have risen three-fold over the past 20 years.
How long is a typical stay in a care home?
According to a BUPA study of all their care home residents, the typical stay is 2.2 years. However, a quarter of residents are still alive after 3.5 years.
What will it cost?
If you or your family want to decide the level of care you receive, covering the costs of care are very much on the individual.
A 2017 Competition & Markets Authority report estimated the cost of self-funded care in London and the South East to be in excess of £1,000 per week – and to be between £800 and £900 per week in the South West, West Midlands and Scotland. Even in the same locality, costs can vary significantly between care homes – so research is needed to find the right fit for you and your budget.
If you elect for the Local Authority to make arrangements, you still pay for it yourself and, if your income is not sufficient, your capital is used at least until you are down to the Upper Threshold of £23,250 in England and Northern Ireland, £50,000 in Wales, or £28,500 in Scotland.
There are guidelines in place outlining how income and assets are used to fund local authority care, including various safeguards. For example, your home is disregarded if it is still lived in by your partner or a qualifying relative. Insurance Bonds are also disregarded. Your pension pot (such as a personal pension) benefits from limits as to how much of the pension can be taken each year to pay for local authority care; if you are married half your private pension income is excluded. Personal possessions, including works of art and antiques, are also excluded.
In terms of paying for care, the choices are multifarious. Finding the right permutation, therefore, requires planning – and you should consult your financial adviser to select the right investment combination for you and your family. If your pension can cover all the care costs, then great; but that is unlikely. In most situations, a large chunk of the care costs must be paid for from assets.
Selling the family home may make a significant contribution towards costs but may be psychologically difficult; it means you are never going home. Cherished personal possessions or works of art may have to be sold or put into storage (which creates its own costs and risks). If the fixtures and furnishings are tired or out of date, there is the difficult choice of either spending capital on the property to get a better price – or accepting a lower offer.
All these decisions take time, which may be in short supply if other assets are rapidly being depleted. That’s why it’s important to discuss them now.
Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.