The Long Term Care Issue
January 26, 2018
Long term care – The Problem
It is no secret that generally we are living longer and for many we are able to live independently for many years in our own homes. But what happens when we are unable to continue to care for ourselves at home?
The increased longevity of the population is causing problems for many Care Homes, the demand for places is increasing but funding for these places is often dependant on the Local Authority, many of which already have stretched budgets. This is therefore limiting their ability to pay for these places, meaning that they are asking for these places at prices lower than they cost to provide.
In consequence, care homes are having to look to self-payers to subsidise the cost of providing care to residents who are funded by their Local Authority, and according to a recent report they pay 41% or £236 per week more for living in the same homes.
Some homes target self-payers, and these are exacerbating the problem by taking custom away from the homes which cater for both self-payers and Local Authority residents, with the result that these homes are struggling to survive.
All of this is leading to a supply and demand problem which may be addressed by the Government in its forthcoming Green Paper on long term care. However, there is a strong case that those that can afford to pay for their own care should be making provision to make sure that they are able to.
Financial support from Local Authorities is available to people whose savings and income are less than £23,250. However, a person’s home will be excluded from the means test if a partner or spouse is still living there.
For many, they will exceed these limits for Financial Support and will therefore be expected to fund their own care.
The advantage of this is that you will have more choice about where and how this long term care is received.
The disadvantage is that provision will need to be made to ensure you are able to fund your own care if required
How we can help
With proper Financial Planning making provision to fund your own long term care need not be a worry and the earlier you start thinking about it the better.
We can assist by carrying out a review of your current circumstances to include a cash flow analysis of how your existing assets may be used to fund your future care, be that via using pension income, savings or investments.
Alternatively, if you are closer to needing care or you have an elderly relative that might, we can assist with other options such as releasing equity from your home to pay for care or advising on products that enable you to purchase an ‘income’ using capital that can be paid directly to a care provider meaning that in many cases, you know your care costs will be covered for the remainder of your lifetime.
If you would like to discuss long term care, or you would like to speak with a member of our team, please contact Sam Davies or call 01772 821021 to be put in touch with a member of our Financial Planning team.
The information in this blog is not intended as financial advice. This is a complex area of financial planning and the information given above is in general terms.