With higher standards of living, improvements in healthcare and advances in medicine and technology, people are living longer. I am lucky enough to have three grandparents, all in their 90’s. With average life expectancy in the UK now at age 79 for males and 82 for females, more and more of us will experience the need for some kind of care in our lifetime. Whether for our elderly relatives today or ourselves in the future, ensuring we are well looked after in our old age is becoming an ever-increasing concern.
The government is taking steps towards a more transparent and fair system that gives individuals more choice and control. In addition to this, we will now benefit from the ‘Care Act’, which came into force yesterday (1st April 2015). However, with nursing care costs averaging £52,000 per annum, it is clear that all of us will have to make significant financial contributions towards the care we receive.
Being able to enjoy a ‘life well lived’ (see Andrew Pereira’s previous blog) while we are fit and healthy, whilst having sufficient means to pay for care when we need it and leaving a legacy for our loved ones, will challenge the best of us. Many people may grapple with just one of these issues but forget they are all interlinked.
At Quadrant, we feel it is vital for clients to create and manage a ‘Lifeplan’, which deals with retirement, life goals, gifts to children by using annual exemptions, and future care costs. This will help us see into the future and put everything into perspective. The plan highlights the ramifications of any discussions made, but most importantly answers the question “will you have enough money for a life well lived, especially if you end up in a nursing home”.
It is also extremely important to put in place a suitable Will and Power of Attorney while healthy and of sound mind. Dealing with such matters at the point of need can be expensive, time consuming and stressful.
In a nutshell, we help you to structure and invest your wealth to meet your lifestyle goals today and in the years ahead, releasing you to get on with the things you really want to spend your time and energy on. If we can stop you worrying about your money, then we have succeeded.
When speaking to my clients and family members, many do not realise there is some help available in the form of ‘Attendance Allowance‘. Anyone over age 65 can claim Attendance Allowance, if their ability to keep safe or look after their own personal care is affected by physical or mental illness or disability. It will not reduce any other income you receive and it is tax free. It is not means-tested, so your income and savings are not taken into account. You don’t even have to actually spend your attendance allowance on care, nor do you physically have to receive help form a Carer. It is based on the help you need, not the help you actually receive. Current rates are £54.45 per week if you need help in the day or night or £81.30 per week if you need help during the day and at night.
The ‘Care Act’ has two main parts briefly explained below:
Assessment – April 2015
With effect from April 2015 you have the right to a free needs assessment from your Local Authority, even if it thinks your finances are too high or your needs are too low to qualify for help. Local Authorities will use a new ‘National Eligibility Criteria’ to decide whether someone can qualify for help and if you receive support, you now have the right to request a personal budget. You can also now defer selling your home to pay care fees until after your death.
The Care Cap – April 2016
With effect from April 2016 it will be even more important to get an assessment of your needs, as there will be an obligation to set up a ‘care account’ on your behalf. There will be a cap of £72,000 on the amount an individual has to pay for ‘care’ in their lifetime. Anything you or the Local Authority spend on your ‘eligible needs’ will be added to your care account. Once it reaches £72,000, they will pay for all your ‘eligible needs’, which are dependent on your personal circumstances. However, eligible needs do not for example include daily living costs, including Care Home accommodation and food. Payments for care before April 2016 will not be taken into account and you will have to pay the full £72,000 again, until you reach the cap. New rules about ‘Top-Up’ fees in care homes may apply if you move into a care home that costs more than the Local Authority is willing to pay.
It’s vital to annually review new regulation changes and consider how these may affect your wealth Lifeplan.
At Quadrant Group, we understand the importance of cash-flow planning and making investments that take into account life’s changing circumstances. With our ‘Lifeplan’ approach, together we can manage your wealth well into your latter years.
This article does not constitute financial advice. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner to take into account your particular investment objectives, financial situation and individual needs. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections.