Funding Care Fees

If someone does not quality for local authority support,  they will have to find some other means of paying for their care.  It is our aim to ensure that you can afford the cost of care for the remainder of your life. 

There are many ways in which long term care can be funded.  The right solution will depend upon your circumstances, resources and timescales. These could include:

Own Income

Some people may already receive sufficient income from their pensions/investments, or rental income from a property to pay for their care.  The reality however, is that the costs of care are considerable and increases are ofen far higher than the rate of inflation.

Savings & Investments:

Savings can include deposit accounts, cash, ISAs and National Savings.  These are considered to be very low risk, but as a result it has to be hoped that interest generated is sufficient and therefore that their capital isn't eroded too quickly.  In times of low inflation the interest rate offered by many savings providers will be insufficient to generate the income needed, forcing the person to draw on the capital, thus reducing the amount available to generate further interest.

Investments may be made up of shares, bonds or Unit Trusts.  All these carry a degree of  risk with no guarantee that their values wont fall.  Unless large amounts are invested it is unlikely that the costs of fees will be covered, again forcing the owner to draw on the capital.

Immediate Care Annuities

These are specialist long term care plans (annuities) which, in return for a one-off lump sum payment generate a guaranteed income for as long as the annuitant lives.  If the income is paid direct to the care provider, it is free from tax (Please note that tax treament may be subject to change).

The main benefit of annuities is that they provide payments for life, and can offer real peace of mind to the person needing care.  This must be balanced however, against the risk that if the person in care dies early, then the capital used to buy the annuity may not be returned - unless additional capital protection is purchased.

The cost of an immediate care plan is based upon the persons health and not simply on the age of the client

It may be appropriate to consider one of the above options or a combination of any of the above. As this is a highly complex area it is important that you seek advice on the most  appropriate method of funding care fees.

Call FREEPHONE 0800 822 3385 to receive a copy of our GUIDE TO CARE FEE PLANNING