LATER LIFE PLANNING

Later life financial planning considers the options in funding care costs for you and your loved ones. This could look like funding to help stay in your home and have carers come to you, or moving into permanent residential care. Care fees are expensive whether the care is in a residential setting or at home.

The care system is complex and can be difficult to navigate without help. Many people believe there is a lack of help when it comes to deciding how to pay for these costs. Most people will have assets above the threshold and will be required to fund some or all of their care privately, making later life financial planning essential.

At Oakworth we have the tools and knowledge to offer you valuable planning advice. We will help you to work out how much money you will need and help you pass your assets down effectively, in the best possible way for you and your loved ones.

When care is needed, the local authority will complete an assessment of your care needs to see if you are entitled to any additional support to pay for some, or all of your care fees. If you have assets above £23,250, this will mean you have to self-fund all care costs. If your estate value drops below this value you may qualify for additional support.

The cost of care varies depending on:

• The type of care you need
• How might your illness progress, will a different type of care be needed in the future?
• The frequency care is needed
• If nursing care is needed
• If care is during the day and or night
• How long the care is needed for
• Where the care home is located
• If you want peace of mind that the fees will be paid for as long as they are needed without running out.

The cost of care generally increases each year and should be factored into your later life planning.

this is where the cost of the fees comes straight from savings and can result in full erosion of the fund.

this can be an attractive option to keep control of the funds.  Investment growth can help the money last longer, however full erosion of the capital is still a possible outcome.

This can be a complex and stressful process and is often resorted to.  Other options could be to rent out the house as a temporary solution until you are ready to make this decision.

This involves giving the insurer a capital lump sum.  In return they pay a tax-free income for life to the care provider for as long as care is needed.  The cost is specific to everyone depending on the level of care required, your age and health.

This is a permanent solution and once set up, cannot be revoked.

Capital protection can be added to the policy.  This can protect 25%-75% of the purchase price.

Deferred Option can be used, where the plan is set up immediately with the payment delayed which can also offer capital protection.

This is an insurance product which pays out a lump sum in the event of death, typically used for inheritance tax planning.  More recently a new feature has become available to pay a percentage of the cover in the event the life assured moves to a care home.

Find out more about life cover here.

Which solution or combination of solutions requires individual later life planning advice to help identify the most suitable approach.

Later life financial planning begins with considering your current financial situation. This could look like thinking about the following:

• What assets do you have, and which will be taken into consideration by the local authority to fund care.  Some investments are exempt
• Do your assets exceed £23,250?
• How much income do you have?
• What is the shortfall to cover the cost of care
• Does your estate have an inheritance tax issue?
• Do you have a power of attorney in place for a loved one to help with making financial and health decisions on your behalf?
• Have you established a Will?
• Can you qualify for additional state help?