Paying for Long Term Care

Outline - Basic Points

1. Long Term Care, which primarily requires nursing, is free and provided by the NHS.
   
   
2. Whereas long term care that primarily requires personal or social care, rather than nursing, is the responsibility of the Local Authority in which the person lives or lived prior to the need arising, and is means tested. This means that the Local Authority will conduct a thorough investigation into your financial position and depending on the results can ask you to pay either for all of the cost of your long term care or at least make a contribution towards it.

For more information about how they assess whether or not you will need to pay for long term care, click here.

For those who are assessed as requiring to pay for their own care, or are responsible for overseeing paying for someone else’s long term care, the main concern will be not be so much the actual weekly cost, but how long care will be required for and therefore will the available money last? Ultimately the main question will be how best to pay for this care to ensure both continuity of care and to try and preserve as much capital as possible.

There are basically two main choices:

1. Investing to provide the required income in an attempt to preserve as much capital as possible, but has the inherent danger that capital could run out before the need for long term care finishes.
2. Buying an Immediate Needs Care Annuity to ensure the shortfall is guaranteed to be met for the rest of the person’s lifetime. This is also sometimes referred to as the insurance approach.

Which way is best will in turn depend on, amongst other things:

1. Your attitude to investment risk. - Unless life expectancy is particularly short, capital is very large or you do not mind how much of available capital is consumed, the cost of long term care often would require a higher risk profile rather than just putting it on demand in an instant access account. This in turn can leave it open to falls caused by stock markets.
2. Your own view as to how long care will be required for.
3. Your preference for simplicity – an investment approach will need regular reviewing and decisions to be made to ensure how best to preserve capital – whereas an annuity or Long term care Insurance if set up right should continue to meet the costs of long term care for the rest of their lives without much involvement.
4. The cost of an immediate needs annuity or perhaps more importantly the percentage of any capital it requires.
5. Whether or not continuity of care is more important than trying to preserve as much capital as possible.

Advice on Care are independent long term care funding specialists and can offer either method. Indeed were sufficient capital is left we can even offer a combination of the two methods. This would then give the benefit that any investment return achieved can help meet the cost of purchasing the original annuity..

To find out more about either method please now click on either of the following links.