Take care: advice for later life

One of the defining challenges of our age is how to meet the care needs of an ageing population. It is good news that we are living longer, but who pays when we need help with the simple tasks of everyday life? Professional advice, while not a panacea, could make a big difference.


Recent years have seen a perfect storm develop around the care system with demand rising and local authority funding falling. Care homes have become increasingly reliant on raising the income generated by self-funders to keep their businesses afloat.


Of the 433,000 people in residential care in England, more than 177,000 are paying their own costs which can run to more than £1,000 a week in some areas and higher if nursing care is required. A further 52,000 are topping up local authority funding with their own money. Many thousands more are paying for private care in their own homes.


Care is an issue that may already be impacting on your clients, either directly or perhaps because they are responsible for elderly parents or relatives. The experience of organising care for others may motivate them to plan carefully for their own care in later life, both financially and legally in terms of expressions of wishes, wills and executors, and Powers of Attorney covering money and health.


To advise on care requires having a relevant qualification. Not all will feel comfortable giving care advice and prefer to refer to a specialist active in what can be a complex market. Regulatory guidance states all advisers should be able to identify clients for whom a long-term care insurance contract should be considered and, if not qualified to advise them, should refer the client to someone who can.


Advisers must consider the full range of options. There is potential for even the wealthiest clients to receive taxpayer funding, for example, under NHS Continuing Healthcare or Section 117 of the Mental Health Act. State benefit options must also be explored including non means-tested benefits such as Attendance Allowance.


Later life planning must take into account all the client’s assets including wealth tied up in the family home which is a potential source of income or capital. Equity release could help fund care received while the client still lives at home. There is the possibility of a deferred payment agreement with the local authority, or alternatively the property could be rented out if in suitable condition.


Often the family will decide to sell the home and fund care through savings or investments. These may include cash in the bank, an investment portfolio, or a care plan. Combining solutions, for example using the income from an Immediate Care Plan to ring-fence care costs, can help protect the remaining assets and aid estate planning.


Income from an Immediate Care Plan (also known as an Immediate Needs Annuity) is tax-free when paid to a registered care provider. It is an individually underwritten annuity reflecting the client’s own health and life expectancy. Capital used to buy an INA is deductible from the estate. Capital-protection and escalation are options. Deferred plans are also available with lower costs reflecting an agreed period before payments stop.


Care plans offer peace of mind that the income needed to pay for care will flow for as long as needed. The benefits extend beyond the client and their family, to the care provider who has guaranteed revenue and for council tax payers too. It is estimated nearly one in four self-funders run out of money and fall back on local authority support. Yet figures suggest only 7% of the 50,000+ self-funders entering residential care each year receive a care plan quote.


How can you help those clients? Not just the ones with an immediate need, but those who know they should plan ahead but don’t know where to start. Offering guidance and advice is a way to demonstrate value and strengthen relationships with clients.


As a specialist provider in the care market, Just has a wealth of knowledge and experience you can tap into. We offer product, technical and business development support through our dedicated telephone team, training with qualifications and help with SOLLA accreditation, and our justadviser.com website.


Care is a growing market that remains largely untapped – working together we can provide the solutions.