Long Term Care Fees

If you have a relative who has to move to either a residential or nursing home, the process can be very disruptive and emotionally draining. The same is true when it comes to care fees planning. We can do little about the emotional aspects, but we can advise you properly so that the financial impacts are lessened if they have to pay their own long term care fees.

The Direct Gov website provides a huge amount of information and links to related agencies, so we haven't  tried to re-create the information you can freely obtain there by clicking the icon in the right hand margin.

If you need help with live in care then we can recommend the services of Able Community Care. They are a domiciliary care agency which provides fully supported live-in care packages across the UK. Each person they care for has their own way of life and they work hard to tailor their service to meet each individual's requirements.

We will assume that you have arrived at the situation whereby your relative's capital is above the £23,000 upper limit (this could be after the sale of your relatives home) and they have to self-fund their care. This is where our expertise as Independent Financial Advisers comes into it's own.
 

You have a stark choice. Either:-

• The money raised will be sufficient to pay the care fees now and in the future and will outlive your relative. In that case, the remaining money will eventually be distributed to the family, or in accordance with your relative’s Will
   

• Your relative’s fees outstrip their funds. This means that there can be no inheritance to pass on, but worse, your relative may have to move to a cheaper home to continue receiving Local Authority funding. This is likely to be at a time when they are most frail and vulnerable.

So, what can you do?

Consult an independent financial adviser who holds specific qualifications to deal with these matters (the Chartered Insurance Institute paper CF8). As professional advisers we hold this qualification.

Undertake a realistic appraisal of your relatives potential life span. Whilst it is perhaps a tendency to assume our parents or grandparents will go on forever (and we naturally don’t want to think of the alternative), someone admitted to a Nursing Home in their 80’s with severe ill health is unlikely to survive another 3+ years. On the other hand, someone in their 70’s suffering from cognitive impairment may be quite happy at a Residential Home and survive for many more years.

Whilst we can discuss plans in each of these scenarios, perhaps the second one is where there are specific products available, called Immediate Care Annuities.

Immediate Care Annuities

At their simplest, the companies providing these will assess the future life-span of the applicant and quote a premium, payable as a lump sum. This will guarantee to pay a set fee directly to the home, free of tax, for as long as the applicant lives. Benefits can be level or index linked. You can select certain guarantees so that, should your relative die soon after taking out the plan, all the capital isn’t lost.

There are no guidance rates for these plans as each are assessed on their merits, but please click the button for an example from the AXA Immediate Lifetime Care brochure (opens in new window)