nEWS AND INSIGHTS

Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

How to fund long term care

Life expectancy is increasing; therefore, it is more likely that you or a loved one will need some form of care in later life. Care can be anything from having a home help visiting weekly to receiving 24-hour care in a residential home. Long term care planning can help you to prepare for the future better. As you move through retirement, it is important to ensure you have enough provision for care home fees.

How much does long term care cost?

The average weekly cost of a nursing home in the UK is £841 a week*, costs do vary depending on the type of care you need, the frequency of the care and your location. Many people do not include care in their financial planning and risk spending the majority of their savings on care fees.

Options to pay long term care fees

We understand the emotional stress and financial worries surrounding looking at long term care for you or a loved one. It can be hard to understand the many options available. Our advisers can help provide clarity and help you to plan for paying care fees.

Funding the cost of long term care can deplete your assets and reduce the amount of inheritance you leave, which is a big concern for many people. Long term care planning can help provide the money you or a loved one will need to pay for care. There are many options to pay for long term care fees including:

Pension income

Income from your private pension and/or state pension can be used to help cover the costs of care. An adviser can help calculate how much you can withdraw while aiming to maintain a comfortable lifestyle.

Arrange a Professional Review of your Pension

Savings and investments

Thorough investment planning could result in a monthly income to contribute to your care needs.

Equity release†

Allows you to access a cash lump sum as a loan secured on your home while still being able to live in the home.

Existing income

You could use existing income to fund care fees, such as income from renting out a room or home.

Enhanced annuity

You can use your pension to buy an enhanced annuity if you have a health problem, are overweight or you smoke. Enhanced annuities typically will provide you with a higher guaranteed monthly income than a regular annuity.

Long-term care insurance

It is currently available in two forms, an immediate need annuity or a pre-funded care plan. In exchange for a cash lump sum, an immediate need annuity will pay a guaranteed income for life to help cover the costs of care provided in your own home or a residential nursing home. Early planning will help prevent you from making difficult decisions quickly and may save you money in the long term as premiums rise, as you get older. Some policies will automatically increase the payments to stay in line with inflation.

Can I claim benefits to pay for care?

You may be eligible to receive state benefits to contribute towards the cost of care. However, this may not be enough to fund the full cost of care so you will still need to plan to cover fees yourself. If you have more than £23,250 in savings, you will have to pay the full cost yourself.

Even if you or your relative has to pay the long term care fees, there are other benefits you may be eligible for such as attendance allowance.

We can calculate your care home costs

 Our financial advisers are experienced in calculating the potential costs of long term care and helping you or your relative not to run out of money in later life. We can calculate how much state support you may receive and create a bespoke strategy to cover any shortfall. We can also recommend ways to help protect your wealth so that some inheritance can be passed on to loved ones.

We can help you with care planning at any stage of life. If you are nearing retirement, or already retired, an adviser can review your portfolio to determine whether you have provisions to cover any care that you or a loved one may need in the future. If you are still working, your adviser can develop a bespoke investment plan to help you to prepare for potential future long term care costs. Not every adviser can give advice on long term care planning. We have advisers with the necessary qualifications who can give you this advice.

Find out more about long term care planning>

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

*Which, Care home fees, 2018

†This lifetime mortgage or home reversion plan. To understand the features and risks associated with such products, please ask for a personalised illustration.

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If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

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How to fund long term care
2018-11-20T10:16:17+00:00
FourWealth Management