walking-stickCurrent estimates are that 433,000 adults are living in residential care settings across the UK. This figure is only likely to grow, as the percentage of over 65’s in the population grows.

In the North West the average cost of residential care is £24,492* per year. That is £2,041 per month! nursing care costs far more!

So who pays?

Seven out of every 10, over 45’s, believe that they are unlikely to need care in later life. Three out of every 10 believe the state will pay. For governments of any political persuasion, this is an impossibility.

The 2014 Care Act was designed to create a fair, balanced system, that was easier to navigate. The first part of this Act started in April 2015. The second tranche which would have introduced the Care Cap in April 2016 has been delayed now till 2020.

The Care Cap would have seen qualifying people ( with assets below £118,000 ) receiving some local authority support. The theory is that people would not have to spend more than £72,000 on the cost of social care, during their lifetime.

This point has been extensively debated, given the fact that not all costs were included in the calculation. In England someone could conceivably spend £177,500 before hitting the cap.

People living in England are assessed by their local council. This is to ascertain how many ‘activities of daily living’ they can undertake. They then are required to pay for their own care until their assets reduce to £23,250. When this figure is reached, they then receive some state funding until they reach the lower limit of £14,250. At this point the local authority is required to fund their care completely.

care-home-aged-care2It is important to note that the person must be assessed to have severe/critical needs in order to qualify for local authority funding support. In addition, under the ‘deliberate deprivation’ rules, someone who has deliberately spent or given away their assets to avoid having to pay for care, can be prosecuted.!

The Local Government Information Unit suggests that a quarter of self funders, fall back on state support after their own money has run out. They have then less control over their care choices at a time when they are most vulnerable.

The typical single pensioner having an annual income of £10,244, will need to consider other options and the need for advice is clear.

Independent Financial Advice pays dividends for the majority who use it. Care is one of those complex areas that is also very emotional. It often involves the entire family. Financial Advice is more valuable than ever.

Look out for advisers with the CF8 qualification. Also the Society of Later Life Advisers (SOLLA) has a list of accredited advisers throughout the UK.


Source data: Laing & Buisson 2014-15, via www.justretirement.com.