Hills Financial Planning

Care costs cause family problems

27th October 2016

Care costs cause family problems

It has been reported that the average annual care home fee is now in excess of £30,000 - way beyond what the average pensioner can realistically expect to receive (which is actually about £14,456). While this is the average, we met a client this week who was paying in excess of £60,000 to fund her mother's care. This was for a care home in the south of England and costs in Northern Ireland are thankfully still considerably lower. The average length of stay in a care home is 2.5 years, so £75,000 is typically needed to cover care costs, and for most, this is just not feasible. While 2.5 years is the average term of care, the high number of people who go into care for the last few months of their lives bring the average down. There are still a large number of people who need care for many years and this can mean significant personal resources are required.

The rise in fees has been attributed to the increase in the wages of the care workers and nurses who staff the care homes, something that cannot really be avoided. The cuts to social care have added increased pressure on those needing care to meet the payments themselves, as resources and funding are reduced by the state. Basically, we are all living far too long for the government to be able to afford to look after us.

Looking after yourself is the number one priority, and so having a plan on how to fund long-term care is a necessity. If you aren't already putting money aside for this then you need to be. The majority of you reading this will not be entitled to state help because the property and other assets that you own, puts you over the £23,250 asset level. Once assets are above this amount, the government does not contribute to the cost of care. So, make sure you don't eat away at what you have carefully ring-fenced for your family, and start thinking about what you may or may not need in the future.       

By David Hill - Chartered Financial Planner, 27th October 2016

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