The following questions are just some of the more common questions we have been asked regarding Long Term Care, paying for care and care fee annuities.
Click on any of interest and you will be taken to the answer. New FAQs will be added regularly and if you have a question that you have been unable to find a quick answer to below, please do not hesitate to contact our specialist arm Care Financial on 01476 589 565 or via our contact form.
I seem to recall that the Government was going to introduce changes to the way care fee is funded in England. What’s happened to this and won’t this mean my mother’s care fees will be met by the Local Authority?
Unfortunately the proposed cap of £ 72,000 and similarly increasing the Upper Capital Threshold to £118,000 enshrined in the Care Act was never implemented.
So as it stands if your mother lives in England and has over £23,250 in non-property capital, it looks as though she will still need to pay for her own care for the foreseeable future. That is unless she is judged to be so ill or in need of ongoing healthcare that she may qualify for free NHS Continuing Healthcare.
Yes there is. First we would recommend you check that you are not entitled to free NHS Continuing healthcare or full Local Authority funding. Second, we would suggest you check you are all receiving all of the state benefits you are entitled to. Then you should find out just how much a care fees annuity would cost as these offer a great way of capping the future lifetime cost of care. For the sake of paying just one single premium, these very tax efficient and safe plans will provide you with an additional income to pay for care. Not only is this income guaranteed to be paid for life, it is tax free and if you pay a little extra, will also increase each year to offset future increase in fees. You can discover more about these plans here
This is impossible to answer here as each one is individually priced and will be based what health issues and history the person needing care has.
We would, however, be happy to get you medically underwritten quotes from ALL providers FREE OF CHARGE and without obligation if you simply complete our Quote Request Form and we will send a simple medical form for you to complete and return which we will then send off for you and obtain the quotes.
Q. My father aged 91 has now been in his care home for several years and is very happy where he is. I am now becoming concerned that his money will not last and I do not want to have to move him simply because his money runs out. I have heard about care fee annuities, but can they still be purchased even though he has now been living in his current care home for some time?
A. The simple answer is yes it doesn't matter how long your father has been residing in a care home.
Indeed, the older someone is and therefore, the shorter their life expectancy is deemed to be, the cheaper the premium is likely to be. There is no problem whether an applicant is living at home, or is already in a care home. Indeed, most care fee annuities are purchased for parents only once they have moved into a care home.
The only problem you may encounter is whether, or not, your father will still have sufficient money to purchase such a plan if you leave it too long as his current care fees will continue to eat away at his savings until a care plan is set up. Unfortunately, some people leave it too late and the costs of care fees have eroded money too much. So, we would recommend that you at least obtain quotes on a care fees annuity or funding plan as soon as possible.
Our partners Care Financial would be happy to obtain accurate quotes from all care fee annuity providers for you FREE OF CHARGE and without obligation - simply complete our Quote Request Form and they will send you a simple medical form to complete, sign and return to them and they will do the rest.
Q. If our mother's health improves and she leaves her care home to either stay with family/friends or alternatively wants, or needs to move care home, will the care plan still continue to pay out?
A. Yes care fee funding plans are portable, so no matter what type of care your mother is receiving when the plan starts, the income provided will continue - no matter where she receives her care, either a different care home or indeed because she can move in with friends/family. The only point to watch is that should she no longer receive care from a registered care provider (such as a care home or care agency), or qualifies for free NHS Care whilst the income would continue to be paid into her bank account, it will no longer be free of tax. However, whilst the current basic rate of tax is 20% (2021/2), like any other annuity, should the income from a care fees funding plan be paid directly to the person’s bank account, tax would only be due on any interest element the provider adds to capital the applicant paid to buy the plan. Therefore, although the current basic rate of tax is 20%, the tax paid will not be 20% of the full amount of monthly benefit provided – only on a small proportion of each monthly instalment.
Read more about Care Fees Annuity.
Although many people often use both terms to describe a long-term care annuity - which is bought to provide an immediate income once long term care is actually required, it is infact wrong to use it in this way.
Long Term Care Insurance is different and by definition describes a policy purchased by anyone who may be worried that they may at some stage in the future need care but currently doesn’t have any likelihood of needing care. They are therefore “pre-funded policies” paid for by either a regular premium or combination of monthly and single premiums. Whilst these long-term care insurances stopped being available a long time ago due to escalating costs and greater life expectancies, a couple of insurers have started to re-introduce some limited more basic policies. You can find out more about long term care insurances by visiting long term care insurances.
Q. My mother needed nursing care and I was astonished at the cost of it and I am now worried that if I need care my children will never inherit anything. Is there any insurance I can take out now to protect me and my family against me ever needing care?
A. Depending on your age a few insurance companies are beginning to offer some limited long term care pay out as an additional benefit on critical illness policies and one Friendly Society has recently introduced a specific but limited Assisted Living Insurance that anyone between the ages of 50-76 can take out to provide a pot of money (either £20,000 or £30,000) to help pay towards some carers you may want whilst at home, help pay for respite care or equipment to help preserve your independence, should you lose your mental capacity or fail two or more activities of daily living. It would need to be purchased by paying a regular premium (which would normally escalate each year) and the amount being dependant on your age and health as well as the size of fund you want. It will not, however, pay an ongoing income to help meet care fees in a care home, so only offers limited protection.
Read more about long term care insurance.
Q. What is the current capital threshold for long term care in England?
A. The Upper capital threshold, above which anyone has to pay for their own long-term care (providing they do not qualify for free care under the NHS Continuing Healthcare) is just £23,250 in England. The lower capital threshold, below which you should be entitled to maximum local authority funding, is just £14,250 (England-2021/2).
Please note in both thresholds, "capital" includes both your own and 50% of any jointly held savings and investments including deposits in banks and building societies as well as current accounts; ISA's, Shares, Unit Trusts or other collective investment accounts, National Savings and Government Bonds and buy to let properties. After the first 12 weeks of permanent care, it even includes the house if your spouse (if applicable) is not going to remain living in the property and no other family member aged either under 16 or over 60 (or any age if disabled) is to remain living in it.
Anyone with capital below £23,250 but above £14,250 will have any assessable capital which is above £14,250 converted into theoretical or "tariff income" at the rate of £1 per week for every £250 of capital above the lower threshold (2021/2). This is then added to your ordinary income from pensions etc and if the resulting combined income exceeds what the local authority is prepared to pay you will need to be a self-funder and need to fund your own care.
This is where professional care fees advice from an impartial care fees adviser such as ourselves can help as we will look at what other funding options you may have.
Read more about how we can help at care fees advice page.
Q. What is the current capital threshold for long term care in Scotland?
A. The Upper capital threshold, above which anyone living in Scotland and who doesn't qualifying for free care under the NHS Continuing Healthcare, has to pay for the their own long term care is just £28,750 (Scotland – 2021/2).
Unlike in England however, Scottish residents are only means tested for the accommodation and food, often referred to as "Hotel" costs.
Anyone who needs care will receive a Personal Care Contribution worth currently £193.50 per week. Likewise, if nursing care is required and is received in a nursing home, they also receive an additional £87.10 per week (2021/2).
The lower capital threshold, below which you should be entitled to maximum local authority funding towards the "hotel fees", is just £18,000 (Scotland – 2021/2).
Please note in both thresholds "capital" includes both your own and 50% of any jointly held savings and investments including deposits in banks and building societies as well as current accounts; ISA's, Shares, Unit Trusts or other collective investment accounts, National Savings and Government Bonds and buy to let properties.
After the first 12 weeks of permanent care, it even includes the house if your spouse (if applicable) is not going to remain living in the property and no other family member aged either under 16 or over 60 (or any age if disabled) is to remain living in it.
Anyone with capital below £28,750 but above £18,000 (2021/2) will have any assessable capital which is above £18,000 converted into theoretical or "tariff income" at the rate of £1 per week for every £250 of capital above the lower threshold. This is then added to your ordinary income from pensions etc and if the resulting combined income exceeds what the local authority is prepared to pay for your accommodation costs, you will be deemed to be a self-funder and need to fund your own care.
This is where professional care fees advice from an impartial care fees adviser such as specialist Care Financial can help as we will look at what other funding options you may have.
To find out more about paying for care if you need to be a "self-funder" visit paying for care.
Q. What is the current capital threshold for long term care in Wales?
A. The Upper capital threshold, above which anyone living in Wales (and who doesn't qualify for free care under the NHS Continuing Healthcare), has to pay for their own long term care is £24,000 if require care at home, or £50,000 if requiring residential care. (2021/2). There is no different lower capital threshold figure in Wales, unlike in England.
If you live in Wales and your capital exceeds £24,000 if require care at home or £50,000 if requiring residential care, you will be deemed to be a self-funder and need to fund your own care.
This is where professional care fees advice from an impartial care fees adviser such such as specialist Care Financial can help as we will look at what other funding options you may have.
Read more about how we can help and how to book an appointment with one of our care fee consultants - care fees advice page.
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