Request a call back

Callback Form

For more information or advice, please fill in your details below and we will contact you shortly.

Sending
×

Who pays for long-term care?

Ensure you’re well-placed to fund any future care needs

Many people prefer to avoid the subject of long-term care. Most find it hard to contemplate going into a care home when they are older, but many will do so eventually. However, planning for these potential expenses is important before they become urgent. The NHS, while a cornerstone of healthcare in the UK, only covers care costs in specific circumstances, primarily when related to medical health needs.

NHS Continuing Health Care (CHC) might cover some or all expenses, but securing this funding can be complex and challenging, especially during stressful times. Despite it seeming evident that certain conditions, such as dementia, require medical care, they are often classified as social care, which typically falls outside NHS funding.

Navigating NHS funding challenges

If NHS funding isn’t an option, you can explore alternatives, often involving personal financial contributions. The rules for providing long-term care are complex, and different rules apply in England and Northern Ireland, Scotland and Wales.

In England you’ll currently undergo a means test. If your assets exceed £23,250, you’ll need to cover the full cost of your care. With assets between the £14,250 and £23,250 tariff limit, the local authority may contribute, but you’ll still be responsible for a portion of the costs. Your income is still considered if your assets are below £14,250, but capital is excluded from means testing, and the local authority pays for your care.

In Scotland, the upper limit is over £35,000, and you’ll need to pay the full cost of your care. The local authority funds some of the care between the £21,500 and £35,000 tariff limit, and you pay the rest. The lower limit is less than £21,500, capital is excluded from the means test, and the local authority pays for your care. However, your income is still taken into account.

In Wales, the single limit is £50,000 and over. Above this figure, you pay the full cost of your care.

Capital amounts between the upper and lower limits tariff for England and Northern Ireland, and Scotland are assessed as providing £1 of additional income for every £250 of capital above the lower limit. The tariff income is then added to your other income for the income means test.

Understanding asset implications

A common misconception is that selling your home is mandatory to fund care costs. This isn’t necessarily true; if you or close family members live in your home, it’s generally safeguarded from being counted in your financial assessment.

However, an empty property, such as moving into a care home, might be considered part of your assets, potentially necessitating its sale to cover costs. Gifting assets to avoid care expenses can also be problematic. Local authorities might view this as a ‘deliberate deprivation of assets,’ which can complicate financial assessments significantly, especially if done during a time when care costs are foreseeable.

Planning for an uncertain future

The unpredictability of needing long-term care makes it essential to start planning early. While it’s impossible to predict the exact costs or duration of care, cash flow modelling can provide insight into how prepared you are for such expenses. Government policies may change, but assuming ‘no change’ and preparing accordingly is prudent. Exploring different solutions now can alleviate future burdens.

Exploring financial options

Long-term care planning is one of the most challenging areas to address, with many in denial about their potential needs. However, taking proactive steps can ensure you or your loved ones receive the care required without financial hardship. From insurance products to savings strategies, numerous options can be tailored to your circumstances to provide peace of mind.

THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.

Adam Reeves

Author: Adam Reeves

DipPFS Cert CII (MP&ER)
Independent Financial Planner, Wealth Manager, Director

Last updated on

Read our reviews

Vouched For
×

After initial meeting Adam put together a very detailed and thorough written plan. At our second meeting he went through the whole booklet and explained everything in layman’s terms which made it a lot easier to understand.

I am very happy with everything that was suggested and put in place especially with something as big and important as pensions. Adam and his team have taken a huge weight off my shoulders and I would highly recommend their services to anyone needing help with their financial planning and pension.  Adam couldn’t have been more helpful, and even came outside his normal area to meet me on a number of occasions.

Richard - Kent

Unfortunately I had to claim on my critical illness insurance due to my wife being ill and because of the sound advice Adam gave in acquiring this insurance we ended up being financially safe through a tough time.

Steve - Kent

Adam did a review of our financial situation, confirmed that Flexible Drawdown best suited our needs as a family, and then did all the research into the best product for us. He will continue to monitor it for me. He acted extremely promptly because we had a deadline for requiring the lump sum; went out of his way arranging meetings during non-office hours, was professional yet friendly and explained a difficult subject very well.

Clare – East Sussex

Adam did a thorough review of my pension policies, clearly explained how well they had performed, how flexible they were, how the market regulation has changed, and, crucially, what the tax implications would be if I were to leave them untouched. He accurately assessed my attitude to risk and recommended an up-to-date solution that will offer me the greatest flexibility at retirement.

Greg – East Sussex

Adam was quick to assess & understand my situation, and was able to discuss & communicate in a very concise and simple way the various options available to me, taking time for me to understand and clarify where necessary. My understanding & knowledge of taxation & pensions has increased significantly allowing me to feel much happier making financial decisions for the future.

Rob – West Sussex

Adam and his team undertook in-depth research into our existing QROPS schemes and clearly set out both pros and cons of transferring the funds back to the UK. Having decided to go ahead with the transfer, Adam and his team worked extremely hard to facilitate the transfer. The QROPS pension trustees were not always the most professional or responsive organisation – however we were very grateful for the perseverance and commitment that Adam showed us as clients.

Jonathan – East Sussex

Adam offered a range of financial products , the one he suggested was affordable and proved to be a good choice.  Returns on investments have exceeded my expectations, based on Adam’s advice and guidance. Profits have enabled house improvements to take place.

David - Surrey

Adam arranged an appointment very timely, he explained his role and qualifications as an IFA giving me reassurance , we went through my retirement and investment goals. Adam discussed my options explaining in great detail, I felt relaxed during our discussions allowing me to fully understand my choices. I feel very confident in the financial advice allowing me to enjoy my retirement.

I was very happy with Adam’s recommendations and explanations of financial products which would suit my retirement goals, I feel this has helped me review and reduce my financial risk as I reach retirement, leaving me feeling confident that I can enjoy my retirement plans.

Ron – West Sussex
Read all our reviews here
×
Indices
Value Move   %     
FTSE 100
8,349.3813.57 stock arrow0.16 stock arrow
FTSE All Share
4,561.216.27 stock arrow0.14 stock arrow
Currencies
Value Move   %     

Market Data

Data is compiled by Adviser Portals Ltd every 60 minutes. Information is not realtime. Last updated: 05/12/2024 at 08:00 PM
×