1Care Fees Planningwith
2Brian FisherMarketing ManagerLifetime Care
3The Ageing Population051015201931 1961 1991 2001 2021 2031 2041UK Population aged 65 +Sources: 1931-2001 Census data2021-...
4The Ageing PopulationUK Population aged 85 +Sources: 1931-2001 Census data2021-41 Government Actuary’s 2006 based project...
50123456190119311951196119711981199120012002200320042005200620102016202120262031203620412046205120562061UK Population aged...
6The Legal System• Wills and Estate Planning• Transfer of Assets......• Solutions for those who are unable to lookafter th...
7The Facts• 418,000 in residential care• Currently 15% of people aged 85 andabove receive care in a Care Home orLong Stay ...
8The Cost of CareCare homes with nursing:The average cost of a private care home withnursing in the Northern Ireland is£56...
9Relevant Legislation• National Assistance (Assessment ofResources) 1992• HASSASSA 1982 & Adjudications Act1983• Income Su...
10LegislationNHS & Community Care Act 1990• Law in April 1993• Encourages care at home and in thecommunitySource : NHS & C...
11Means Testing• Assets over £23,250 (in N. Ireland)which can include your property• Health and Social Care Board setmaxim...
12When home may be disregarded• Spouse/partner still resides in dwelling• Relative over 60 resides in dwelling• Relative w...
13Deprivation• Must be deliberate deprivation• No time limit needed to prove• 6 months - recovery from recipient• After 6 ...
14The Health & Social Care Act 2001• Introduced “free” nursing careIn N. Ireland single rate of £100.00 per weekPayable by...
15State Benefits• Attendance Allowance(2013/14)Higher rate - £79.15 per wkLower rate - £53.00 per wk• Carers Allowance - £...
16Care Funding Solutions• Pay from income• Use investments to produce an income• Draw down capital• Immediate Needs Annuity
17Immediate NeedsAnnuities
18Immediate Needs AnnuitiesFor those already requiring care.• Regular monthly benefit• Single premium• Care at home or in ...
19Options:• Indexation LevelRPIRPI+2%Choice of 3% to 10%• Premium ProtectionProtects : 25%, 50%, 75% of total premium• Lon...
20Meet Harry
21Care at Home• Harry is aged 79• Currently in a wheel chair• Suffered a stroke last year• Paralysed down one side• Determ...
22Current situation• Current Income from all sources £21,800 net p.a.• Domiciliary Care Costs £49,700 p.a.• Household expe...
23Harry’s concerns…….• Worried that he is a burden to family• Choice of care• Would like to be financially independent• Wo...
24Family’s concerns…...• Dad secure and well looked after• Capital running out• His father lived to 90• Although suffered ...
25Options available• Invest the capital to produce income• Achieve a typical 3.5% net return on £230,000= £8,050 p.a.• Cur...
26Solutions• Purchase Immediate Care plan– Cost a lump sum of £143,955– Provides £35,400 p.a. increasing by 5% p.a.• Tax E...
27Harry’s views• Choice of care• Financially independent• Flexibility for care cost increases andpersonal spending money• ...
28Family’s views• Father able to stay at home• Predictable net income• Additional capital for additional expenses• Peace o...
29Government proposals...2017?...2016?... 2015?.....The Care and Support Funding Reform Proposals:• ONLY APPLY TO ENGLAND!...
30Friends Life Company Ltd , the provider of the Lifetime Care range of plans, isauthorised and regulated by the Financial...
31Navigator Financial Planning Ltd3b Milltown HillWarrenpointCo Down BT34 3QYT: 028 3085 1199E: david@navigatorFP.comNavig...
32Care Fees Planningwith
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Care fees planning

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This presentation, by Brian Fisher of Friends Life for Navigator Financial Planning, explores the issues facing those needing care in old age or because of serious injury. He presents one interesting solution.

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  • Nat Ass (A of R) 1992 deals with Means Testing and the Income Support Regulations HASSASSA = Health and Social Services and Social Security Act : Section 21 deals with the guidelines on the 6 month rule. Section 22 deals with charges on property Inc Supp Regs covers the treatment of assets given away prior to 6 months before requiring care. Nat Ass Act covers the requirement to maintain a person for whom one has responsibility. Insolvency Act - legislation used by LAs to take take action on a debt over £750 (£1,500) in Scotland
  • Care fees planning

    1. 1. 1Care Fees Planningwith
    2. 2. 2Brian FisherMarketing ManagerLifetime Care
    3. 3. 3The Ageing Population051015201931 1961 1991 2001 2021 2031 2041UK Population aged 65 +Sources: 1931-2001 Census data2021-41 Government Actuary’s 2006 based projectionsMILLIONS
    4. 4. 4The Ageing PopulationUK Population aged 85 +Sources: 1931-2001 Census data2021-41 Government Actuary’s 2006 based projections012341931 1961 1991 2001 2021 2031 2041MILLIONS
    5. 5. 50123456190119311951196119711981199120012002200320042005200620102016202120262031203620412046205120562061UK Population aged 85+MILLIONSYou are hereSources:1901-2001 Census data2002-61 Government Actuary’s 2006 based projections
    6. 6. 6The Legal System• Wills and Estate Planning• Transfer of Assets......• Solutions for those who are unable to lookafter their own financial affairs.–Power of Attorney–Enduring Power of Attorney–Lasting Power of Attorney (England andWales only)
    7. 7. 7The Facts• 418,000 in residential care• Currently 15% of people aged 85 andabove receive care in a Care Home orLong Stay Hospital.Source : Laing & Buisson, Care of Elderly PeopleMarket Survey, 2010
    8. 8. 8The Cost of CareCare homes with nursing:The average cost of a private care home withnursing in the Northern Ireland is£563 per weekSource : Laing & Buisson, Care of Elderly People MarketSurvey, 2010….but can cost considerably more.
    9. 9. 9Relevant Legislation• National Assistance (Assessment ofResources) 1992• HASSASSA 1982 & Adjudications Act1983• Income Support (General) Regs. 1987• National Assistance Act 1948• Insolvency Act 1986• Health and Social Care Act 2001
    10. 10. 10LegislationNHS & Community Care Act 1990• Law in April 1993• Encourages care at home and in thecommunitySource : NHS & CCA 1990 Policy Document• Reduces State financial burden
    11. 11. 11Means Testing• Assets over £23,250 (in N. Ireland)which can include your property• Health and Social Care Board setmaximum limits for cost of care• All available income compared with thisfigure
    12. 12. 12When home may be disregarded• Spouse/partner still resides in dwelling• Relative over 60 resides in dwelling• Relative with incapacity resides in dwelling• Dependent child under 18 resides in dwelling• First twelve weeks after entering a care homeSource: Charging for ResidentialAccommodation Guide (C.R.A.G.)
    13. 13. 13Deprivation• Must be deliberate deprivation• No time limit needed to prove• 6 months - recovery from recipient• After 6 months - no case against recipientSource : Charging for ResidentialAccommodation Guide (C.R.A.G.)• Insolvency legislation
    14. 14. 14The Health & Social Care Act 2001• Introduced “free” nursing careIn N. Ireland single rate of £100.00 per weekPayable by the Health and Social Care Board directlyto the care home• Property disregarded for the first 12 weeks• Deferred Payment Scheme
    15. 15. 15State Benefits• Attendance Allowance(2013/14)Higher rate - £79.15 per wkLower rate - £53.00 per wk• Carers Allowance - £59.75 per wk• NHS Continuing Care
    16. 16. 16Care Funding Solutions• Pay from income• Use investments to produce an income• Draw down capital• Immediate Needs Annuity
    17. 17. 17Immediate NeedsAnnuities
    18. 18. 18Immediate Needs AnnuitiesFor those already requiring care.• Regular monthly benefit• Single premium• Care at home or in a Care Home• Paid for life• Benefits can be indexed• Premium Protection Option• Tax free - paid to registered care provider• Taxable - when paid to policyholder
    19. 19. 19Options:• Indexation LevelRPIRPI+2%Choice of 3% to 10%• Premium ProtectionProtects : 25%, 50%, 75% of total premium• Long Term• Short Term (first 3 or 6 months)Immediate Needs Annuities
    20. 20. 20Meet Harry
    21. 21. 21Care at Home• Harry is aged 79• Currently in a wheel chair• Suffered a stroke last year• Paralysed down one side• Determined to stay at home• Doesn’t want to sell his house
    22. 22. 22Current situation• Current Income from all sources £21,800 net p.a.• Domiciliary Care Costs £49,700 p.a.• Household expenses £ 7,500 p.a.• Shortfall in income £35,400 netp.a.• Capital £150,000 Investment portfolio£ 50,000 National Savings Certificates£ 30,000 Building Society• House £550,000 he wants to pass onThese figures are for illustrative purposes only.
    23. 23. 23Harry’s concerns…….• Worried that he is a burden to family• Choice of care• Would like to be financially independent• Worried about having to leave his house• Would like to leave an inheritance
    24. 24. 24Family’s concerns…...• Dad secure and well looked after• Capital running out• His father lived to 90• Although suffered a stroke still strong andmentally alert
    25. 25. 25Options available• Invest the capital to produce income• Achieve a typical 3.5% net return on £230,000= £8,050 p.a.• Current Income £21,800 + £8,050 = £29,850 p.a.• May have to move into a care home• Meet the care costs from capital• Risk the capital being used up and having to sell the houseThese figures are for illustrative purposes only
    26. 26. 26Solutions• Purchase Immediate Care plan– Cost a lump sum of £143,955– Provides £35,400 p.a. increasing by 5% p.a.• Tax Effective– Tax free benefits paid to registered care provider• Surplus capital of £86,045– £11,045 for immediate access– £75,000 invested for legaciesThese figures are for illustrative purposes only.
    27. 27. 27Harry’s views• Choice of care• Financially independent• Flexibility for care cost increases andpersonal spending money• Not a burden on family• Should be able to leave an inheritance
    28. 28. 28Family’s views• Father able to stay at home• Predictable net income• Additional capital for additional expenses• Peace of mind
    29. 29. 29Government proposals...2017?...2016?... 2015?.....The Care and Support Funding Reform Proposals:• ONLY APPLY TO ENGLAND!• Introduce Longevity Cap of c.£72,000• Increase means test threshold to £118,000• Introduce accommodation charge of c.£12,000 pa• A Universal Deferred Payment Scheme
    30. 30. 30Friends Life Company Ltd , the provider of the Lifetime Care range of plans, isauthorised and regulated by the Financial Services Authority, register No 185063(www.fsa.gov.uk/register/home.do)A company limited by shares, registered in England No 3291349.Registered office: Pixham End, Dorking, Surrey. RH4 1QAAs part of our commitment to quality service, telephone calls may be recorded.The address for written communications isThe Friends Life Centre, PO Box 1810, Bristol, BS99 5SN.Telephone 0845 30 30 430Further InformationFurther Information•Full details of our range of products & services are available from yourFinancial Adviser•This presentation is based on our understanding of current Law and HMRevenue and Customs practice which could change.
    31. 31. 31Navigator Financial Planning Ltd3b Milltown HillWarrenpointCo Down BT34 3QYT: 028 3085 1199E: david@navigatorFP.comNavigator Financial Planning Ltd is authorised and regulated by the FinancialConduct Authority. FCA registration no 587701.Further InformationFurther Information
    32. 32. 32Care Fees Planningwith

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