Care: can you afford it?

Andy Hopper, Independent Financial Adviser and Long-Term Care Specialist at Manning and Company, answers questions about the cost of residential and nursing care.

Andy, there have been announcements in recent months about changes in funding for residential care. What have these been about?

The government has been looking at ways to reform the rules for residential and nursing care funding. They have been guided by the Dilnot Commission Report, published in 2011. Amongst other things, the Report proposed capping the costs which individuals would have to pay for their care. This is good for those with assets, as it limits the amount they would be expected to pay; and also means that their home would not necessarily have to be sold to fund care.

So what is the current situation?

From 2017 anyone with assets (including their home) worth more than £123,000 will have to pay for the first £72,000 of their care costs. Additionally they will pay “bed and board” of up to £12,000 annually when in a nursing home. 

That still sounds like a lot of money!

Yes; it’s important to not only focus on the £72,000, but also the on-going costs of up to £1,000 per month, every month, for the rest of the person’s life. Yet the fact is that more than 80% of people are entering full time care without seeking prior professional advice about funding. What happens if the money runs out?  Can the family cover the costs - or will the person have to move, which can be very distressing? And where would they go? 

But doesn’t the State have an obligation to provide residential care if it’s needed?

The State can provide residential care - but the question is whether it is the kind of care the individual and their family want: for many it will not be. Alternatively, the family may have to make arrangements for care at home, which may not be ideal, and cause disruption for all concerned. 

What can be done?

This is a complex area, and each case is different. Seeking professional financial advice early on to explore all options is absolutely imperative. This can help ensure the cost of care is fully met for as long as required - and most importantly provide peace of mind for the person needing care and their family.