An ageing population means in many cases that estates are being eroded by the high costs associated with caring for people in later life.
Did you know for example that the average weekly cost per person for a care home in the South-East is £641 – rising to £874 if nursing is also required.* Given the high costs of nursing homes, most people are NOT in a position to meet the fees purely from their income in retirement.
So there are considerations to take into account:
A funding shortfall
If an individual has capital in excess of £23,250** then that person will be asked to make their own contributions – although there are some amendments to the rules surrounding fund assistance. Financial planning needs to take into account the level of nursing home fees measured against income from private and state pensions. In all likelihood there will be a shortfall that will need to be addressed from other sources – including a property.
Property – a source of capital
It may be an emotional wrench, but a property can generate a useful rental income to part-pay, or pay nursing home fees in full. Family or those with Lasting Power of Attorney may elect this option if there is future value in the property. Then there’s always the option to sell the property and use some of the capital to meet the shortfall.
Don’t run out of money
If the stay in a nursing home runs in to many years it can seriously erode capital. This can be avoided with careful planning – arranging investments to produce high levels of tax efficient income to assist with the fees for example. Planning could also mean having some capital to pass on to beneficiaries.
To learn more about Funding for Nursing homes contact us now on 01892 559 555.
*Laing & Buisson Care of Older People, UK Market Report 2013/14
**As of 10/2015