Following a Royal Commission report on long term care, ‘free nursing care’ in England was introduced. In reality with the funding of just over £150 per week, this money is merely a contribution towards an individual’s needs from a Registered Nurse.
However, with people living longer than ever, an increasing number of individuals require some form of care in later life. For the first time in history, there are almost 12 million people aged 65 or over in the UK and research shows that one in three women in Britain, and one in four men aged 65 today need long term care.
The funding of such care is an issue that is likely to affect most people’s lives in one way or another. We work with our clients to ensure that they have enough income and capital available for their retirement to give them the lifestyle that they are looking for, yet ensure they make sensible decisions and consider that circumstances later in life can change.
Having worked hard all their lives, our clients want to remain financially independent and fear that care costs could drain their opportunity to leave an inheritance to those close to them. People are often distraught at the thought of having to leave their home whilst others fear losing control of their life.
To avoid any of the above scenarios, forward planning is key. If people go into care and have no plans in place, the Local Authority (LA) will look at the need for care and the estimated cost of that care as well as deciding who will pay. The LA will review the individual’s income and capital (pensions, earnings, dividends, investment bonds, property, rental income, etc).
If a person is self-funding and able to make the initial decisions, their capital may still run out. If they or their family can’t meet the shortfall, the LA will then be in charge of making decisions on their behalf which is not always in-line with the individual’s or their family’s wishes.
We work with clients to plan their financial affairs throughout every stage of their lives.
When clients come to us who are retiring, they want to ensure they can lead the life they aspire to in retirement, whilst being mindful that they may well need to cover care fees later in life. Invariably, they also want to maintain sufficient funds to allow for leaving legacies.
Strong long term relationships with our clients are key to our business. We manage our clients pension planning, investments, inheritance tax planning and if they own a business, we guide them through a succession plan which is vital.
It is a common misconception that when an individual enters care and is self-funding but has a shortfall in income, then the only option is to deplete capital. This is not the case, there are other options available to ensure that the required care fees for the preferred care home of their choice are met for their lifetime. This provides peace of mind to both the individual in care and also their family.
It is important to obtain specialist financial advice where possible, to explore the different funding options and associated risks. We work with our clients and their family’s to find the most suitable solution for the individual concerned.
By Caroline Williams, Wealth Manager at Flavell Wealth Management
Caroline Williams provides full holistic financial advice to clients at Flavell Wealth Management. Specialising in planning for long term care, Caroline is SOLLA (Society of Later Life Advisers) accredited advisor and helps individuals and their families to plan their financial affairs should they lose capacity and need to go into care.
Caroline Williams DipPFS
Flavell Wealth Management
Partner Practice of St. James’s Place Wealth Management
5th Floor, Walker House, Exchange Flags, Liverpool, L2 3YL