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Paying for Long Term Care

long term care

It is rare to pick up a newspaper these days without reading something about the ageing population and the associated stresses being placed on Social Services because of their increasing and protracted care needs.

Particularly alarming is a report from Partnership Assurance which states that less than 5% of people over 65 have made any financial provision for the future cost of care. There is an expectation that the Government will pick up both the expense, and also the contractual arrangements with carers and residential care homes.
Many of us find out that dealing with care is not straightforward when our own parents can no longer manage on their own. At this stage, we learn about the challenging process for securing domiciliary care and/or a suitable care home.

Due to the high cost of residential care, Social Services encourage people to remain in their home for as long as possible supported by teams of carers who can make home visits on three or more times a day. The cost of such care in England and Northern Ireland must be funded by the householders if they have assets of more than £23,250. Slightly higher figures apply in Wales and Scotland.
When it comes to selecting a residential care home, there is a maximum weekly amount which Social Services will contribute even if a resident’s assets are less than £23,250. Thus if a family wishes to select a more suitable or convenient home, any excess cost must be borne by themselves.

If a surviving homeowner moves into long term care, their home is counted as part of their eligible assets and will often have to be sold or pledged to finance a period in care. This can come as a great shock to their beneficiaries.

It is not possible to enter into an Equity Release plan unless the applicants are homeowners and resident in their property. In this regard, Lifetime Mortgages can be an excellent method of paying for domiciliary care packages as the applicants remain in their own homes. For example, a plan can be entered into which provides a cash reserve from which funds can be withdrawn as and when the money is needed to pay for care bills. Furthermore, a cash lump sum can be taken out for converting the home so that it is more appropriate for elderly people.

By using Equity Release to pay for domiciliary care, a move into a residential care home can be delayed or even prevented thus removing the need for the family home to be sold.
If you would like to learn about how Equity Release can help to fund domestic care, an impartial adviser from a company like Bower offer a free consultation at which your needs and those of family members can be discussed on a confidential basis.