There is no doubt that having to move into a Nursing or Residential Care Home can be a highly emotional time in itself. However, coupled with this is the fact that the costs associated with moving into a Home (or even having care provided in your own home) can have a debilitating effect on your wealth. Taken together, they can be quite devastating for individuals and their families.

Research conducted by healthcare analysts, LaingBuisson has found that the average cost of Nursing Home Care is now £750 a week (Report dated 2015). This equates to nearly £40,000 per annum.

In the Partnership Care Report 2016, it was confirmed that the average stay in care is 4 years and 1 in every 8 `self-funders` stay in a home, is for at least 8 years.

In the LGIU Independent Ageing 2013 report, they state that, unfortunately, 1 in 4 people who fund their own care run out of money.

How detrimental could all this be to you and your loved ones?

You may think you would receive help from your Local Authority. You may get some general advice, but from a financial perspective, any support available is means tested. This means that you may enjoy little or no assistance at your time of need. Indeed, if you have income more than £23,250 in England (£23,750 in Wales or £25,250 in Scotland)* you will have to pay for all your care needs. The means-tested sum will include your savings, income, and maybe your property. Indeed, it is not until you only have savings of less that £14,250, when it`s only your income which is considered for means testing.

You may also have considered that there would be some prudent actions you could implement to reduce this impact on your wealth. You might have thought about giving away or selling your home to your children or other family members to reduce the value of your estate. You might even have thought about placing certain of your assets in trust hoping to achieve the same result. 

However, you should be aware that such actions are fraught with problems, whether or not there has been a legal transfer of ownership. Your Local Authority will almost always ask you questions about disposal of assets and certainly make enquiries.

There are no time limits on how far a Local Authority can go back when considering deprivation of assets. Additionally, if the property was given away before you needed care, the Local Authority could ask the recipients of the property to pay a contribution towards your care. 

Clearly, the significance of the costs associated with long term care can severely impact on your wish to pass on wealth to the next or future generation. You need to ensure you are aware of the rules which apply in this area as you wouldn`t want to fall foul of the traps and pitfalls that can catch you out and cause you to lose even more financially.

On this basis, it seems only sensible for people to consider seeking out expert advice in this area while you can do something to protect your wealth.

Contact our specialist long term care team to find out how we can help you - telephone 01483 521521.  

*Local authority long term care income limits 2018/19