Planning how best to pay for long-term care will increasingly become a huge issue for an ageing society.
And especially as Government promises to sort out the mess have failed to materialise beyond allowing councils an extra rates precept to help deal with the problem.
However, councils only pick up the tab for care costs once a person’s assets fall below £23,250.
According to a July 2017 survey by Prestige Nursing + Care, the average UK cost of being in a care home is £33,904 annually, up almost ten per cent. The figure for the West Midlands was £33,228.
Consumer champions Which found that In 2016-17, the average weekly cost of a room in a residential home in the UK was £600, and one in a nursing home £841, £31,200 and £43,732 a year respectively. For the West Midlands the rates were £573 and £837.
The cost of care at home is usually significantly cheaper, but that is not always appropriate as loved ones become frailer.
In all this, there are various basic provisions you can take to help yourself long before a crisis is reached – make a will, set up a power of attorney so others can take over your finances when you are no longer able to look after your affairs, and ponder hard on what to do about the family home, many people’s biggest asset.
All this needs careful thought so consult an adviser – your relatives may have your best interests at heart but it is important to get independent guidance especially as there have been horrible instances of children fleecing parents in order to achieve an enhanced lifestyle.
Contact your local council and ask for a care needs assessment to be carried out – you are entitled to one regardless of your income and savings.
If the whole prospect of what to do seems scary, then let me give you an example, concerning a 93-year-old widow, her health and her finances.
She was in and out of hospital after falls and ultimately was released with a prognosis that she would pass away in days.
A hunt around nursing homes had drawn a blank but just when the family were despairing a place came up in one with a decent reputation.
So serious was her predicament she left hospital with the support of NHS Continuing Healthcare which paid the vast majority of the fees.
To medical amazement she stubbornly refused to die.
Indeed, excellent nursing care at the home got her back physically while mentally she remained sharp.
So much so that NHS Continuing Healthcare was eventually withdrawn. That meant, with substantial assets, mostly in shares, some already in trust, a pot built up in part for just such an eventuality, she was required to self-fund her care home costs.
Thankfully she had organised power of attorney so her sons were able to take over her finances.
The only aid she was eligible for was Attendance Allowance of around £220 a month plus her state pension.
In consultation with her advisers, and with a distinct eye on inheritance tax considerations, it was decided to sell the family home, some of the proceeds being gifted to the sons under the seven year rule, backed up by the nil rate band and Residence Nil Rate Band allowances, and the rest added to her savings.
Ultimately her care costs in the region of £45,000 a year are roughly half-funded by share dividends, pension and Attendance Allowance, the remainder coming from liquid elements such as a Cash ISA.
So her assets are partly being maintained and partly being denuded.
Manageable but worrying.