Adrian Garside

Many people find themselves going into Long Term Care quite suddenly – often they go into hospital and don’t go home. For others there is time to plan, but the planning doesn’t start until Long term care is inevitable – until then you hope to avoid it completely.

Some people ask about planning ahead – can they take out a ‘plan’ that will pay for Long term care in the event that they need it.

The answer used to be a cautious ‘Yes’ – there was just one policy available, with Partnership.

However, the last government set about reforming the Long Term Care sector (although didn’t) and the new government has plans to do so and this has meant that Partnership stood alone – a risky position. It’s unlikely any other insurer would enter the market knowing that all the rules are going to be changed.

Consequently, Partnership only sold 21 Long term care Insurance policies last year. They have decided to withdraw the product from the market.

However, Partnership have stated that although the product is withdrawn, they will keep it ‘on the shelf’ until next year – next year the Long Term Care Commission makes recommendations on how the Long term care world will look in the future – just in case there is an obvious place in the new market for a pre funded plan.

We don’t worry about long Term Care until we have to – usually when a family member can no longer manage on their own.

But, most people know the basics.

It costs alot, it’s pretty hard to find a home that costs much less than £500 per week, commonly they are £600 – £700 pw and the nicer ones are £900 – £1100 per week.

And the other thing we know is that until you have sold your house and spent all but the last £23,000 of your life savings you have to pay for it yourself.

The second part of this is where I come in.

Quiet often paying for Long term Care is just a question of paying for it out of savings. But there is a second method which sometimes works and today I have had figures through for a customer that proves this point.

The client in question is widowed so the house needs to be sold (not usually necessary if the spouse remains in the house). And the house and his savings come in at about £160k total. The long term care costs are about £650pw and his pension income covers about £200pw. So, we need to find £450 per week.

Well, if he sells the house his £160k will attract, say £70 per week interest, so we will need to draw on the capital, until it is depleted down to £23000. It will last 6 years.

In the meantime, he will be getting stressed about his life savings just disappearing, and heaven knows what quandary his children will be in.

However, the plan B can come to the rescue.

I have a plan that will fund the long term care forever, in exchange for a lump sum. The companies who provide this plan will assess the life expectancy of the client and offer terms based on that assessment. For today’s client, they are saying that for a lump sum of £65000 they will pay the long term care costs for his lifetime.

If he lives 1 year, he will have lost out. If he lives 10 years, the company will lose out – the break even point is about 3 years – so there is a gamble to this (there are slightly dearer plans with a ‘return of fund’ promise in the event of death.)

So, for £65000, he knows that the balance of his savings are protected for his children, they aren’t disappearing towards zero. His children also know that their inheritance is protected, saving them from that awful quandary.

Sometimes the figures aren’t so easy, when the life expectancy is high, which is why I say this isn’t for everyone. However, in this example the plan really works pretty well.

It also has ‘soft’ benefits too. It can take the ‘money’ stress out of the family relationship – people in long term care often genuinely hate paying for it – getting a monthly bill for £2500 is huge. The other thing is – if there is a lovely home for £750pw and a pretty good home for £700 per week, it can make the lovely home affordable.

And isn’t that what it’s all really about?

photo credit: ePi.Longo  There are occasions when an elderley person is discharged from hospital straight into a Care Home setting. As a Financial Adviser who works in the sector I get a call saying  ‘Help’ because finances all need sorting out to pay the Care Home Bills.

The thing is,  sometimes this needn’t happen.

The NHS is obliged to provide ‘Continuing Care’ for those whose care needs go beyond a certain level of healthcare.

Obviously, the NHS are watching the pennies so quite often requests for Continuing Care are declined, sometimes wrongly. And that’s only the people who ask, many people won’t even find out about it, or will assume that they won’t qualify because surely the hospital would have told them…

Anyway, I can help to a certain extent, in that I ask every client if they have applied for Continuing Care and I’d encourage them to ask, even if it’s a long shot.

However, there are some specialists in this field – Paladin Continuing Healthcare Specialists – www.paladinchs.com

Paladin are Anne Reed and Jeanette Roberts. Jeanette is a Solicitor, Anne used to be a nurse and became a solicitor. Together they are experts on NHS Continuing Care and will know whether you should recieve it, or not, and if they think you should receive it, they will help you obtain it.

So, if in doubt, contact them, they are very approachable and will be happy to discuss your situation.

Full story – http://www.dailymail.co.uk/news/article-1254881/Cigarettes-killed-Message-smoker-funeral-hearse.html

Albert Whittamore died from smoking, and now must be applauded for trying to get the message across and also answering the question that everyone asks when they see a hearse “I wonder what happened”

This trend could continue, and then you can imagine ‘one upmanship’ entering the equation – I will be amending my will to include instructions for “died spying for country while jumping across rooftops” to be on the sign in my hearse – I’m not taking my final journey with everyone knowing that I died playing a quick game of patience.

This fits with my oldest sons birth certificate, where I convinced the lady at the registry office that I was a ‘special agent’. Should keep geneologists guessing in years to come.

I am also now amending my divorce story from ‘we gradually drifted apart’ to “she caught me in bed with two women”…

OK, that may be a little on the confident side, but I am armed with the official statistics from…the Office for National Statistics. Oh yes, the nights fly by in the Garside household.

If you want to join in the excitement, here they are.  My blog stats will show how many people click on this link – my bet is very few!  I’ll tell you what, I will give you a bit of detail now and you could come back to the link afterwards.

So, there is a list of life expectancies for kids born now and 18 year olds now. Further down the page is the life expectancy for people aged 65 now, and this is the interesting bit for me.

So, if you are a chap turning 65 now, you have  decent chance of living another 18 – 20 years… Girls, will last about 3 years longer than chaps.

If  I had been writing this blog in 1950, I’d have been saying 65 year old boys will last another 12 years, girls 14.4 years.

So, on average we’re living longer and that’s nice.

And, it’s the reason planning for an income in retirement is so important.

There are lots of ways of planning for an income in retirement – notice please that I don’t say ‘paying into a pension’.

Retirement for people of my age will have to be planned differently, just paying into a pension won’t cut the mustard any more, the advice needs to be much more holistic and will include 2 things – paying for life as you live it, and a plan for if you end up requiring long term care.

The income side of things may include:

Old age pension,Second state pension, pension tax credits, heating allowance, free TV licences and bus travel, but also making a bit of cash from your hobbies, taking in a lodger, being a helpful man at B & Q, ebay/Carboot trading, self sufficiency ideas like keeping chickens or bees, shrewd use of your savings, actively reducing your bills etc.

And, it will include pension planning, but planning your whole retirement based on a pension now will be too big an ask, it has to be a more imaginative approach these days.

It will be different for people retiring in the future than it is now, but different doesn’t necessarily mean bad.

The long term care thing may be trickier, but since only 1 in 5 go into long term care, it needs a less ‘urgent’ plan, paying a monthly payment is often not worth the struggle, but it’s worth knowing the costs and knowing the various mechanisms for paying for those costs.

What you need is an imaginative Financial Adviser who knows all this stuff…

Oh, and if you want, now go back and click on that link

Progress on my Long Term Care website has slowed, and it’s my fault – the website designer is fine but she can’t create the words, I have to do that bit.

On the bright side, I have been approved again for membership of Hampshire County Council’s Trading Standards Department’s ‘Buy With Confidence‘ scheme – which is a feather in my cap, this isn’t the easiest test to pass, as you may imagine!