Long Term Care Planning
The not so good news is that the gap between average Life Expectancy and Disabled Free Life Expectancy (DFLE) is growing faster than ever before, which means that far too many of those extra years are being spent in poor health with multiple long-term conditions, frailty, dementia and social care needs.
The truth is, the most recent data points towards more, not less, ill-health and disability in later life.
The Gap Between Living Longer and Government Spending
Interestingly, the fastest growing age bracket is the 85+ age group, which grew almost a third (31.3%) in the decade between 2005/06 and 2015/16. That's followed closely by the 65 - 84 age group, which grew by almost 21%. Experts say that this growth in the number of people aged 65+ is one of the most significant factors behind the rising demand for health and care services in this country.
And it's only going to get worse because these age groups are predicted to grow at a frightening pace over the next two decades: 113.9% for the 85+ age group and 48.9% for those aged from 65 - 84.
Whilst in real terms, the government are spending more money on Long Term Care – and are committed to continue increasing that budget, it’s unlikely to keep pace with the frightening rate at which the demand for Long Term Care is set to grow. And that has implications for all of us.
Did you know, for instance, that there's a 1 in 3 chance that at least one half of a couple will need Long Term Care?
Another important point to note is that there's huge inequality within the population. In the local authority area with the lowest DFLE, men can only expect 2.8 years in good health at age 65 while women can expect just 3.3. In comparison, in the local authority area with the highest DFLE men can expect 14 years in good health and women 16.7 – for both men and women this represents a staggering near five-fold difference in the prospect of good health after the age of 65.
The Need for Sound Long Term Care Planning
As with all things, the sooner we start planning for the possibility that we may be affected, the better. And if you haven't already asked yourself the question, "what happens if I/we need Long Term Care?" then now's, definitely, the time.
Because we're being 'squeezed' at both ends.
Not only are we more likely to need Long Term Care during our lifetime, the cost of providing that care has also been steadily rising. The net effect of this 'squeeze' can quickly erode a lifetime of hard work and savings, leaving very little for your loved ones in your will.
The average cost of care homes in Hampshire and across Southern England is between £700-£1,000 per week and very few people have an income of £50,000 a year in their retirement, to cover that cost.
All of this means that assets, including the family home, may need to be sold and more and more people are finding that they have to sell their homes to help pay for their Long Term Care. This is leaving many families disinherited.
However, a correctly written will can help safeguard their share in your property.
Given the picture these facts paint, we’re impressing upon our clients the need to plan for the eventuality that they may well end up needing some form of Long Term Care - and we'd advise starting that right now.
Understanding How Long Term Care Funding Works
Funding for care is ‘means-tested’ and if you have assets, including your home, of just over £23,250 (2016/17), you will be liable to fund your own Long-Term Care needs, in full.
As with all support offered by the government, it's a lot more complicated than that and, in order to plan for this, you need to have a basic understanding of how Long Term Care Funding works and how it's assessed. Here are a few facts to get you started;
- Long Term Care funding falls in to two categories: the assessment for the contribution towards the costs of care, if you are getting care in your own home, and the cost of assessment for when care takes place in a Residential Care Home.
- If you’re having care in your own home, the value of your home is disregarded when assessing your funding because you're still living there. If you’re in a Residential Care Home, the value of your home is included in the assessment and your property will be sold to fund your care.
- The value of your home may be disregarded under certain circumstances. For instance, if your stay in a care or nursing home is expected to be temporary and you intend to return or where you intend to sell your home to purchase something more suitable to your needs, the value would be disregarded. The value may also be disregarded when your partner, former partner, civil partner or another family member (that falls in to certain categories) still occupies your home.
- With good planning, it's entirely possible to protect your assets, including your home, but the sooner you start that planning, the better, before it's too late to do anything.
- If you have savings of more than £23,250, you will be fully self-funded. i.e. You’ll have to pay for your own care needs, in full, until the level of your savings erodes to below that level.
- Once your savings fall below £23,250, Social Services will start to contribute towards your care costs. When your savings fall to below £14,250, Social Services will pay your care costs in full.
- Care in a Residential Care Home or Nursing Home is, generally, far more expensive than care in your own home and will erode your savings far more quickly.
For more details, you can check out the most frequently asked questions here.
If you prefer to take advantage of our Free Consultation, call us on 02380 879243 or complete the following form and we'll be happy to schedule a time to discuss your specific situation and requirements;
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The information provided here is intended to address the types of questions that people are often concerned about.
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