Long Term Care
The Problems To Be Faced
"The numbers of dependent older people in the UK are projected to grow from approximately three million in 2000 to approximately 6.4 million in 2051, an increase of 113 per cent."
Source: "Future demand for long-term care in the UK." (London School of Economics 2004. First published 2004 by the Joseph Rowntree Foundation).
"... those of us who have been lucky enough in our lives to have our own homes now, we are then faced, if we get to a nursing home: 'Right. You have a house? Right, we'll have that. You have £50,000 savings, we'll have that', and so all one's life one has paid taxes ..., and then suddenly the nest egg one has built up, either for yourself in retirement or for your dependants, is taken in order to pay for this long-term care."
Source: The Royal Commission on Long Term Care, March 1999.
"... for the foreseeable future long term care will be a "people industry". It needs people to wash, dress and provide for the intimate needs of older people who can no longer do these things for themselves. The costs of care in the future will therefore be largely influenced by the earnings of people providing personal care which make up about 70% of the total costs of such services. These will need to be enough to attract the right quality of worker to this kind of work, at the right level of productivity and, of course, to comply with what ever minimum wage level is in force at the time."
Source: The Royal Commission on Long Term Care, March 1999.
"... these are considerable sums of money. If a married couple were to save against the risk of long-term care they would need £85,000 to be sure of meeting the average cost of a residential home for each of the couple for three years. Many people live in residential or nursing care for even longer periods and therefore would need a much larger sum of money. Perhaps 10%-15% of people who enter residential care might require it for more than five years, and would become totally impoverished by the time they died."
Source: The Royal Commission on Long Term Care, March 1999.
"... older people need long-term care not simply because they are old, but because their health has been undermined by a disabling disease such as Alzheimer's disease, other forms of dementia or a stroke. As yet these diseases cannot effectively be cured by medical care, but people suffering from them will require ongoing therapeutic or personal care of different kinds in order to enable them to live with the disease. In this regard, the only difference between cancer and Alzheimer's disease is the limitation of medical science. The sufferer is in no less need of care because of that limitation. Yet, as we show in Chapter 4, the amount of state help available varies significantly between the two situations.".
Source: The Royal Commission on Long Term Care, March 1999.
" ... I remember one lady ... who was in hospital and all of a sudden received a letter telling her that her house was going to be sold. She immediately discharged herself home ... it is an iniquitous thing that an elderly person, at their most vulnerable time of life, should have their home sold from under them in order to pay for their care after a lifetime of work and service to the nation."
Source: The Royal Commission on Long Term Care, March 1999.
The Remedies To Be Taken
It was against the worrying background of the issues described above coupled with the frequency of situations being presented to which we could offer little or no effective remedy at the time, that we decided to add Long Term Care (LTC) advice to the services we provide. Accordingly, Wilcox Young is a member of IFACare, the national IFA organisation for Long Term Care.
When is the right time to start thinking about the care you may need in later life? Planning for an adequate retirement via pensions and other investments has almost become the norm. Indeed, it is an area in which we specialise.
But the need for LTC can blow an enormous hole in any plan for financial security.
Our research has revealed that the decision to make provision for medical and support services in the event of chronic illness or conditions associated with old age is one which should be taken with great care and consultation.
The practical and legal considerations surrounding this problem need to be considered by the family as a whole, almost certainly in conjunction with a specialist lawyer. And the earlier the better!
The first step is to ask yourself the following questions on the assumption you will need to provide for Long Term Care at some time in the future:
1) Is it important to me to safeguard my home to pass it intact to my heirs? (Yes/No)
2) Is it important to conserve other assets for the benefit of my spouse or children? (Yes/No)
3) Am I concerned whether a Local Authority Home would be acceptable? (Yes/No)
4) Would I want to stay in my own home for as long as possible? (Yes/No)
5) Am I concerned whether there would be sufficient income for both of us? (Yes/No)
If you can answer NO to all the above you probably have no need to consider matters further.
If you answered any with a YES there are a number of points that require further consideration, including:-
a) How much of the cost of care, if any, can be met from existing and potential sources?
b) How many people need to be considered and what alternative help may be available from family or friends?
c) Would you need to sell assets (eg. family home) and is this acceptable?
d) If you are likely to be caring for parents, is this a practical proposition? Should you consider effecting cover for your parents benefit?
e) Should a Power of Attorney be arranged in advance to make sure decisions can be taken when necessary?
f) Does your will accurately reflect your wishes if care costs reduce your assets?
g) Are your views reflected in an Advance Medical Directive (otherwise known as a Living Will)?
The level and type of care needs careful thought as this effects the costs and levels of benefit. For example, help with shopping and respite care is not as expensive as skilled care by qualified nurses in nursing homes.
Why not give us a call to see how we can be of help?
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