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Meeting The Costs of Care

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Affording the cost of care in later years is currently a concern for many of our aging UK population.

To address these concerns, Chancellor George Osborne, announced that the cost of care for anyone of 65 will be capped at a lifetime contribution of £72,000 from April 2016.

Whilst this has brought a sigh of relief to those wishing to protect their life savings for their loved ones, the details of this headline grabbing announcement might not be as comforting as first thought.

Firstly, there is an eligibility requirement which must be met by an individual.  The requirements seem to extend to those with considerable care needs and apply to those who require assistance with washing, dressing and eating on a daily basis.  It also depends on where a person lives and the value of their assets.

Secondly, all individuals in receipt of such assistance still need to contribute £230 per week towards their living costs which is over and beyond the headline grabbing cap of £72,000.

Thirdly, the £72,000 cap will only consist of costs that would be paid by the Council if they were paying.

So how would this affect you? We demonstrate how it would work with a working example:

In a situation where the care home charges amounted to £800 per week, but where the local authority would have paid only £630 per week to that same care home, the sum counted towards the £72,000 cap will be worked out as follows: £630 – £230 (living costs) = £400 per week contribution towards the cap out of your total expenditure of £800 pw.  Under this example therefore the total expense to an individual under the lifetime contribution rules would actually be £144,000 before they reached the £72,000 cap.

To see how the new system will directly affect your personal circumstances or someone that you know, we recommend visiting the BBC website for their useful care cost calculator as guidance.

So what can you do?  The answer is simple; prepare and plan your estate sooner rather than later using professional legal and financial advice. Planning now can save you and your intended beneficiaries a lot of money.

SWLaw can help you mitigate further care home costs using simple and effective methods in reviewing your legal and financial needs. We can create for you effective Wills, help you to consider how you should protect your share of your property and advise you on the use of Trusts.  For example, in a Will, a Trust can effectively be used to provide that your next of kin can enjoy your share of your property but without it being considered as part of a person’s assets when it comes to being assessed or even used towards the lifetime care contribution.

SWLaw work closely with specialist financial advisors who can protect your assets for you and those that you love whilst maintaining financial security for yourself.

If you would like more information or to arrange a no obligation meeting with our specialist team, please contact David Kelshall on 01752 205 202

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