There is no doubt that local authority residential care is expensive – it averages out at about £30,000 per year. And how much you have to pay for it depends on what assets or savings you have.
As the upper and lower limits used to decide how much to charge people remain unchanged for the ninth year in a row, Margaret Rowe, a Partner in our Wills, Probate and Lifetime Planning team, discusses what you can do to protect your assets:
In England, the threshold rates of £14,250 (lower limit) and £23,250 (upper limit) are used to decide how much you need to contribute towards the cost of your residential care.
If you have more than £23,250 in savings or assets, you will receive no local authority help towards your bill. If you have less than £23,250 but more than £14,250, your local authority will calculate how much you have to contribute depending on your total assets. If you have assets under the lower limit, your care will be fully funded.
The failure to review and increase the capital limits is serious – in real terms, they are now 12 per cent lower than when they were set at this level nine years ago. As care costs have risen, the capital limits haven’t so essentially people are facing bigger personal liabilities.
With no sign of the care funding crisis abating any time soon, it’s more important than ever to protect the assets you have. There are ways to plan for your old age and protect your assets such as giving cash gifts to family or setting up an Asset Protection Trust to protect a jointly owned property against being sold to fund care.
But it’s vital not to fall foul of the Deprivation of Capital rules. This is where you’re deemed to have deliberately given away your wealth so you don’t have to pay for care so the key is to start your planning as soon as possible - in fact, way before you need care.
Everyone’s financial and care circumstances are individual and a solicitor who specialises in planning for later life can help identify the best course of action for you.
* Margaret specialises in all aspects of wills, probate work and elderly client matters, including estate planning and succession. Her experience means that she can advise on the full range of private client matters from Court of Protection work to inheritance tax planning.
She is also member of the Society of Trust and Estate Practitioners (STEP) and also a member of Solicitors For the Elderly (SFE). If you'd like to know more, contact her on 01952 208433 or by email at Margaret.Rowe@fbcmb.co.uk.