What you need to know about health care when you get old

The number of people aged 85 and over has increased by a third to 300,000 in the past ten years.

This is set to put more demand on the care sector – so how will you deal with your later life care?
  • All aspects of medical care are paid for by the NHS.
  • Social care involves help with activities of daily living, often at home. This is means tested and if the person has the funds they will pay for this themselves. It’s supplemented by NHS services for illness or sickness.
  • Care homes: They offer more than can be provided by a GP and visiting nurse. There would be a registered nurse on duty at all times. Again, if sufficient income is available they will pay for it but the NHS would cover £115.05 per week of the cost for nursing provision. 
You can see that much of this is means tested around your income, which includes pensions and any attendance allowances. 

Later life expert Clive Barwell, an independent financial adviser and head of later life advice at Wren Sterling, said: “If your income is not enough, savings are taken into account.

“If you have more than £23,250 including your home, you are deemed to have income to pay for care and your savings will be eroded. Once you reach lower threshold of £14,250 in England, your savings are no longer deemed to generate enough income.

“If and when continuing medical care overtakes need for social care, the NHS takes on burden, but it can be unclear where the borderline is.”

You can plan ahead for your care later in life, but when should you begin?
  • It depends on individual preferences.
  • The picture can take time to become clear.
  • Only 16% of over 85s are in long-term care homes.
Clive said: “It’s something to keep in mind but not a prime requirement for retirement … you should balance between saving for the future and enjoying retirement while fit.”

Different ways to pay for care
  • Savings: Decide when to start and in what form.
  • Buy an annuity; although this can cost as much as six years of income. It would pay shortfall for the rest of your life. A £120,000 outlay might indefinitely meet a care fee deficit of £20,000 per year.
Can you protect your inheritance when paying for care?

“There is very little you can do,” said Clive. “Couples can approach this by correct provision in the will.

“What clients may think about is giving assets away. It’s appropriate for gifting to take place which doesn’t impact on your standard of living in retirement. And if you’re fit and well and there’s no illness looming, you should remember that it can’t be undone. Although if care is imminent, the local authority can claw gifts back to pay for care.”

How can a financial adviser help?

An independent financial adviser can have a much broader view than a solicitor. They can look at giving advice with a background of knowledge of legal, financial and emotional factors. They may be able to help preserve some assets by turning them into a trust – or altering the tenancy on a property, which would mean only part of its worth was taken into account for means-testing. Organising lasting power of attorney might also be important to you – without it, if the elderly person loses mental capacity, the local authority will make its own decisions on where to care for your loved one.

Nick Moules, head of marketing at Wren Sterling said: “The UK population is getting older - and quickly. Between 2005/06 and 2015/16 the total number of people aged 65 or over in England increased by close to 21 per cent, representing nearly 1.7 million extra people.

“People are living longer as well, as we are seeing more people aged over 85.

“While everyone is living healthier lives than ever before, naturally there is going to be a pressure point on care at some stage.

“This is likely to mean that in future we need to pay more ourselves for care if we want to enjoy a similar quality of life.”

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