Long-term care planning should be front and central in your estate planning, to ensure any future requirements you may have are sufficiently provided for.
In the third of our series "Top Questions About…", we look at long term care planning; what it is, why you need it, and why you should start planning as soon as possible.
1. What is long-term care?
We may require help and assistance with day to day living, personal care and more due to poor health, a disability, or just aging. Long-term care is care that is required for a sustained period of time.
Long term care planning enables you to put in place sufficient financial provisions for any care required, so it's ready and waiting when you need it. You can also specify your care wishes in your Lasting Power of Attorneys (LPAs).
2. What are the different options for long-term care in the UK?
Options for long-term care include:
- Daily home care, where carers come into your home to deliver personal care
- Live-in carers, who live with you in your home
- A residential care home
- A retirement community with access to care as required
The type and level of care available in the UK does vary according to where you live. The same applies to costs, benefits and care funding, some of which are means tested.
3. How much does long-term care cost in the UK?
The cost of all levels of care is rising rapidly. According to Carehome.co.uk website:
"If you are paying for your own care, the monthly average cost of residential care is £4,640, while nursing care in a care home costs on average £5,640.”
For home care, the costs depend on the frequency and length of visits.
For live-in care, costs depends on the level of care required.
"Generally, live-in care fees start at around £900 to £1,400 per week but can be as much as £2,000 per week. The cost of 24-hour care at home will vary depending on your needs, what services you require and what provider you choose.”
4. What funding can I get for long-term care?
Funding for care is not a 100% certainty. If you have worked and have made sufficient NI payments over the year, you can receive the State Pension. You might also be entitled to benefits such as :
- Not means-tested:
- Personal Independence Payment (PIP)
- Attendance Allowance
- Universal Credit (partial)
- Means-tested:
- Housing cost element of Universal Credit (if under state pension age)
- Housing Benefit (at state pension age)
- Housing costs support
- Council Tax reduction
- Pension Credit
However, all benefits are primarily designed to top up your income, so are not usually sufficient to cover your long-term care needs on their own.
5. How can I pay for (self-fund) my own care?
Long-term care planning is about putting in place measures to pay for your long-term care through savings and investments, without the immediate needs to sell assets including your home. Contact us at Panthera Estate Planning to discuss putting your long-term care arrangements in place.
6. Will my local authority pay for my care?
Not necessarily. As we explain on our long-term care page:
"Your local authority can take 100% of your assets to pay for your long-term care. Only those who have assets totalling less than the £14,250 threshold will be entitled to the maximum possible public funding. This immediately eliminates anyone who owns their home outright, who has savings, ISAs, stocks and shares, or other valuable assets.”
Here's how it works:
| Your Funds |
How much you will pay |
| £23,250+ |
All your own fees as a 'self-funder' |
| £14,250 - £23,250 |
Your council gives some financial support
and
You pay a contribution from your income + a tariff income.
|
| Under £14,250 |
The council provides financial support
and
You pay a contribution from your income
|
As Age UK explains, even if you have less than this amount and are eligible:
“Your local council will calculate the overall cost of your care and do a financial assessment to find out how much you'll need to contribute to the overall cost.
The council must make sure that the overall cost you're entitled to (called your personal budget) is enough to pay for at least one suitable care home. You'll be expected to pay towards the cost from your income included in the financial assessment, for example your pension.”
So, If your local council considers that you can pay for your own care, you may have to sell your home, use your savings and investments until they run out, and not be able to leave any inheritance for your children and grandchildren.
At Panthera Estate Planning, we can help with potentially protecting your assets - call us for your initial free 30 mins initial meeting to discuss your situation and requirements.
7. When should I start planning for my long-term care?
The earlier you plan, the better. Take professional advice on long-term care planning in your 40s or 50s, while you're more likely to be healthy and be financially able to set some funds aside. Don't leave it until you retire.
Also bear in mind that you might require long-term care after a serious accident or major illness at any age.
8. Do I need a lawyer or financial advisor for long-term care planning?
Long-term care planning should be part of your overall estate planning. After all, you don't want to set aside large amounts for your children for when you die, only to subsequently need that money for your own care during your lifetime!
At Panthera Estate Planning we offer impartial advice based on Paul's decades of experience as an independent financial planner and his insights as a Retirement Coach too. You should also seek information from your own financial advisor and be aware of provisions you may have already made in your Will, such as Trusts.
9. Do I need Lasting Powers of Attorney (LPAs) as part of my long-term care planning?
We'd say you should have your two LPAs (health and financial) in place whatever your age!
In your LPAs, you appoint one or more people (known as attorneys) to make decisions about your finances and health care if you become unable to do so yourself. For more on LPAs, see our Top 15 Questions about LPAs here.
We offer fixed rates for LPAs, including a special rate for couples who complete all four LPAs (two each) at the same time. Contact us for more details.
10. How can I update my long-term care plan as my needs change?
When you create your long-term care plan with Panthera Estate Planning, you can regularly review your plan and adjust it, based on any changes in your health, finances, and/or family situation.
Long-term care planning with Panthera Estate Planning
For all your estate planning requirements, contact us. We’re happy to help you put your affairs in order, so you can relax and enjoy your future life without worry.