Cost. Care is expensive and in the last 10 years, prices have grown considerably faster than the Retail Price Index due to the increase in demand and lack of provision.
At Grace, we supply many families with advice across different price brackets and our services are available to many of the UK’s leading financial providers.
How can people deal with these challenges?
The need for care is becoming one of the sad realities of modern living. The real challenge is turning this reality into a positive experience, not something that is bolted onto life in an emergency.
The best way to achieve this is through forward planning and preparation. There are two main areas people should prepare for:
The first is financial preparation. It is important to understand the funding provided by the state when it comes to care.
Most funding is means-tested and in England, for example, local authorities do not typically provide financial assistance for anyone with capital over £23,250 (and if you’re looking for residential care, this will include the value of your home if you live there alone).
There is some non-means tested support available in certain circumstances, but it is limited.
Assuming your clients have assets over £23,250, they will probably be liable for the full cost of their care, so how much should they expect this to be?
Care options vary hugely of course, from assisted living to care at home and residential care, but to give you an idea, two hours of care at home per day could cost around £18,000 per year and residential care can cost over £65,000 annually.
This means financial preparation for care needs to be considered early on and not just by the elderly.
And importantly, people need to retain access to their money. We see many people who have prepared for legacy planning, resulting in funds being tied up in trusts, or families who have gifted money to their children and need to ask for it to be returned.
That is one of the reasons Business Relief (BR) Services are becoming increasingly popular, they can offer both investment growth and access to savings.
BR or Business property Relief (BPR) is a Government-approved provision, launched in 1976, that incentivises investment in certain types of trading companies.
Shares of BR trading companies that have been held for at least two years attract up to 100 per cent relief from inheritance tax when ownership of the shares is transferred to the beneficiaries upon death.
The second crucial area of planning is practical preparation. This is wide ranging, but her are some examples that advisers might want to consider.
