To successfully plan for the impacts of future care fees, it is imperative to consider the financial aspects. In order to properly do this, determining affordability, budgeting for such eventualities and considering asset protection options are critically important.

Assessing Affordability:

The first key step is to determine your current financial position and to identify whether you are well placed to afford any potential long-term future care. There are several steps that can help you determine this: –

Income Assessment:
You should assess where you stand in terms of your income, including pensions, investments, and other sources. This will help determine the available funds that can be used towards your care.

 

Means Testing:

Means testing is a significant aspect of the Care Act and determines an individual’s financial eligibility for local authority support.

 

The financial assessment considers the individual’s income, savings, assets, and property to determine the level of contribution they should make towards their care costs. The means test seeks to ensure fairness in the allocation of public funds for social care.

 

Local authorities assess an individual’s total capital (savings, property, investments) and income (pensions, benefits, etc.) to calculate how much they can contribute to their care costs.

 

Following the financial assessment, individuals may receive a personal budget, representing the amount the local authority will contribute toward their care. This can be used to purchase care services or manage care needs.

 

There are upper limits set by the government, and individuals with capital below these limits may be eligible for more financial support. At the time of writing, if you have capital of £23,250 or over you will need to pay for your care in full. With assets below this, you will receive support from the local authority towards the cost of your care, but this is incremental based on the level of your capital.

 

State Benefits:
Benefits can provide a welcome contribution to care funding. There are many in England and Wales to which you may be entitles, including but not limited to Attendance Allowance, Personal Independence Payment or Universal Credit

It’s important you check your eligibility for any of the above.

Care Costs:
It’s important to be aware of the current and potential future care costs in your area, as different types of care (at home, residential care, nursing care etc.) can have varying expenses.

 

Budget Planning:

Once you know where you stand from an affordability perspective, you can then look at what you will need to achieve or maintain affordability.

Creating a budget that covers all living expenses, including accommodation, food, utilities, and any additional care-related costs is vital to help you prepare for the future cost of your care.

There are many guides on how to do this available online, and templates that make this easy to complete.

 

Asset Protection:

 

One critical thing you may not initially consider when planning for future long-term care is the need to protect your assets.

Many of the assets you’ve spent your life building or putting in place could be swallowed up quickly by the cost of your care, but there are steps that can be taken to protect yourself from such eventualities.

Property Considerations:

The means test determining what you need to pay for care would consider the value of the property/properties you own as an asset that can be used to pay for care. We have a great team who can provide all the advice you’ll need in regard to property ownership and potential exemptions.

Financial Planning:

It may prove pivotal to explore financial strategies to protect assets, such as setting up trusts, transferring assets, or purchasing annuities.

Estate Planning:

Consider the impact of care fees on your estate and plan accordingly. This may involve creating a will or updating an existing one. We have a great team of experts on hand to prove support/guidance with this.

We’ve Got Your Back

If you need such advice, speak to us today. Call Stuart on 01254 88 08 34, email enquiries@watsonramsbottom.com, talk to us via live chat or alternatively complete our Contact Us form and one of our expert advisors will be in touch

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