How to plan and finance elderly care for yourself or your loved ones
Whether you are thinking about your own future or that of elderly parents or loved ones, the question of how to finance adequate care for the elderly is an important one – and one that is too often left to the last minute.
However, experts are clear that the earlier you consider these issues, the better the chances of finding the right kind of help for your family and the less stressful the experience will be.
“It’s always best not to do these things in a hurry,” says Janet Davies, who heads the Symponia Specialty Care Advisory Group.
“Instead, be sure to talk to family members about what they would like and give them different options, if the Covid restrictions allow it.
“Discussions on how to pay for care should also take place as soon as possible. “
It can be difficult to know where to start when approaching this topic. The steps below should help you understand the different options and prepare you for what can be a very stressful time for the whole family.
Put the legalities in place first
One of the hardest things to deal with when a family member suddenly needs care is knowing how to manage their day-to-day finances when they can’t do it on their own. Making sure you have proxies in place well in advance makes it easier.
Sarah Coles, personal finance expert at Hargreaves Lansdown, says it’s important to have both one Lasting Power of Attorney (LPA) for health decisions and one for financial decisions. “If you lose the ability to make your own decisions, an LPA means you can appoint someone you trust to make them for you,” she explains.
“If you don’t have an LPA in place, someone will have to be appointed an assistant instead, which can take a lot longer and cost more, which can cause major problems if they have to pay for care.
“If you have to appoint an alternate, a court will decide the limit of their powers. There is also an annual fee, and the deputy is overseen by the Protection Court, so they usually have to produce an annual report detailing all decisions, as well as income and expenses.
Registering your power of attorney can take ten weeks, so it’s best to do it as soon as possible. There is more information on how to do this at gov.uk/pouvoir-d’avocat.
Talk about your family’s wishes
With the legal framework in place, it’s time to have some tough conversations. Talking about the need for care can be difficult, as few people like to think of not being able to live independently.
A conversation about the costs of future care and whether aging parents have particular preferences for a safe house or caregivers coming to their own property can be very helpful at this point as it helps you. to know what to plan. .
“You might find that your mom knows her friend is having a good experience in a certain place and is happy to go, for example,” says Janet Davies of Symponia.
The quality and cost of shelters and home helpers vary widely, so it’s a good idea to do your research ahead of time.
Home care is also often an option, either by using an agency such as Helping Hands or the new Curamcare website, which allows self-insured caregivers to register their services, reducing costs and ensuring that you have dealing with caregivers paid above the minimum wage.
Think about the costs
A recent study by Just Group, a private equity and retirement funding company, shows that most of us are shocked by the cost of care, as well as the lack of financial support from the government.
“If most people’s planning is all about keeping their fingers crossed and hoping it never happens to them, it’s no wonder they end up experiencing a system that they find confusing and confusing. expensive, ”says Steve Lowe, communications director for Just Group.
It is difficult to know in advance how much the treatment will cost. You don’t know how long or at what level your family member will need it. But it’s good to get an idea of what the costs might be – and what help might be available.
According to Which ?, the average cost of a retirement home in 2019-2020 ranged from £ 551 per week in Northern Ireland to £ 858 in Scotland.
The average cost per week in England is £ 681 for an institutional care place and £ 979 for a nursing place.
The main difference is that a nursing home always has a qualified nurse on site to provide medical care, unlike a nursing home. Nursing homes are necessary for older patients with more complex needs.
Discuss payment options
Families have different ideas about how care could be funded. In some cases there may be savings available and families can be confident that they will be able to hold the course with them. Others might consider programs such as the Equity Release, which allows you to withdraw money from an individual’s home to pay for care, or they might consider selling a property.
These are all big steps, and there are potential pitfalls with any plan, so it’s worth talking to a financial advisor who specializes in financing care. Councilors who are members of SOLLA are well placed to understand your specific needs.
There are care annuities and other plans available whereby, for a specific lump sum, you can guarantee that the money goes to the caregiver to fund care for the rest of an adult’s life. While these plans are very beneficial if someone lives long, they are much less beneficial if someone spends little time in care.
Janet Davies, at Symponia, says it’s possible to build in some protection so that if someone dies very soon after purchasing a plan, some of the money goes back to their estate. . And even if you think this type of plan isn’t right for your family, it’s a good idea to get quotes.
“The people who review them are highly skilled actuaries, and the calculations they provide will give you a good idea of the costs of care and how long a person might live in a home,” she says. “It’s much better than trusting your instincts. “
Understand the process
When it comes time to discuss an imminent need for care, your first step is the individual’s local authority.
The authority performs a free, means-tested care assessment and will help you know what care the person needs, what is available and if they are eligible for funding.
A care plan will then follow, indicating what is needed and whether help is available from the local authority.
Armed with this, your family will be able to find a suitable shelter or home care for a family member, hopefully with less stress thanks to the advance preparation you put in place.
Check the funding rules
Funding nursing homes is complex, and you may find that your family receives little help from the government.
It is a particularly difficult situation right now as social protection reforms have been delayed by the pandemic and a promised cap on care costs has seen legislation passed but not implemented.
Although this makes planning difficult, there are a few things we do know. If you go to a shelter or need home care, you will have to pay for it yourself, unless you have a limited amount of savings.
In England, the council will cover the full cost of care for those with savings and assets below £ 14,250, while those with more than £ 23,250 should cover all of their own. costs. Between these numbers, the cost is split between the individual and the government.
If you receive home care, the value of your home is not included in these savings and assets, and so is if a spouse or dependent occupies the property.
In some cases, if the need for care is primarily physical and nursing care is required, the NHS will pay for your care under what is known as a ‘continuing care’ package. In practice, this is not often the case with older people in nursing homes, so you cannot assume that your family member will receive this help.
Even if someone is funded for care from the local authority, this may not cover the type of home or care you would like.
In this case, a family may have the option of supplementing the payment from the local authority to ensure that the care received is suitable for you.
Do you have a story to share?
Contact us by sending an email to [email protected]
TO KNOW: The employment gap for people with disabilities: “I was told to live on benefits because that’s what people like me did”
MORE: How to Navigate Judgment and Questions if You Want to Continue Wearing Face Masks
How to get your Metro newspaper fix
Metro.co.uk lifestyle email
Get your lifestyle essentials and news straight to your inbox.
Not convinced? Find out more