Arranging and funding care is an issue gradually working it’s way up the national consciousness, however, for those of us that settle down on a Sunday morning with The Archers for a little escapism, it is at the forefront of a continuing storyline.

In recent months the Archers and the Aldridges have had to cope with Jack Wooley’s declining health since his diagnosis with Alzeimers Disease and wife Peggy’s insistence that he must stay at home and that a care home is out of the question.

As a care fees specialist, advising those in just this position, I congratulate the script writers with the gradual way the storyline has developed. I know from experience that Peggy’s reaction is a common one and the stroke she recently suffered is one way in which the strain of coping with a loved one’s illness can manifest itself. The family’s uncertainty of how to achieve a solution to satisfy ‘mum’s concern for Jack’s well being, whilst ensuring that she is relieved of the role of primary carer leaves them feeling at a loss as to how to help and not knowing where to turn.

Then comes the awareness that Peggy is making economies and has developed a certain ‘carefulness’ with money despite being financially ‘comfortable’. Daughters Jennifer and Lillian finally pluck up courage to address the matter of money with mum, and the floodgates open, that the drop in income over the last year has resulted in her worrying about paying for Jack’s care and her own needs, that she has felt unable to cope but not wanting to be a burden to her very busy family. Well, Brian has now reviewed Peggy and Jacks investments and has agreed to set up a meeting with his financial adviser who is ‘an excellent chap’.

It’s how the story is developed from here that interests me, with only 150 advisers in the UK specialising in care fees funding, I wait to see if Brian’s ‘excellent chap’ is one of those and if not, if he will refer Peggy to such an adviser. I hope he does as an experienced specialist will not only be able to advise on exclusive options for funding care but would also be able to provide guidance and valuable points of contact for sourcing possible care solutions. If such an adviser had been consulted early on, not only Peggy, but the whole family, would have had a point of continuing guidance in all matters relating to Jack’s care and Peggy’s finances.

As Peggy herself observed this week ‘who knows what the future holds’, well in her case the script writers do! For family’s in similar circumstances, however, there is no script writer and so they are on their own, until, that is, they talk to a care fee specialist!

Much has been written and broadcast on the subject of care fees, pre and post publication of the Green Paper on Adult Social Care. As with any emotive subject, we may expect a varying degree of accuracy, I looked at the subject on the internet this weekend and found sites referring to changes in 2007 as forthcoming! Indeed I noted the Governments own website, Diectgov, publishing outdated figures with regard to the Means Test Threshold.

Of greatest concern, however, are the anecdotal references to individuals being forced to sell their property, during a declining market, to fund care fees. This is a highly contentious issue likely to cause a great deal of concern and distress to those arranging care and whilst it is an option, it is not a ‘fait accompli’.

Often the only realistic way to fund Care fees is to sell, or release equity from, the family home, the proceeds may be used to purchase an Immediate Care Plan (ICP) or invested in the hope that the money will fund the care home fees for as long as care is required. Equity release and home reversion schemes may be considered where a spouse continues to live in the property, however, this is not possible where a property will be left empty once someone has made the move into a care home.

Through consultation with specialist advisers such as The Wealth Care Partnership, plan providers continue to improve their products to suit the changing demands of the market.

One such example comes in the form of an innovative way to pay care fees, without the need to sell the family home. Essentially, it is a loan, secured against the property, which is then used to purchase an Immediate Care Plan. Interest is payable on the loan but is ‘rolled up’ and does not become payable until the property is sold, or upon death when the loan and all accrued interest becomes payable. The loan can be repaid either partially or in full at any time without penalty.

What sets this aside is that the loan is available on empty and let properties giving the family the option to await optimum market conditions before selling. The Care Plan Payment Option typically means that the funding of Care fees can start as soon as the need is identified without having to wait for the property to be sold.

Equity Release providers also continue to improve the flexibility of their offerings making scheme’s less restrictive and a more attractive financial planning tool. Indeed Safe Home Income Plans (SHIP) is launching a debate involving regulators, Government and consumer organisations on how these products may continue to evolve to help with the huge pressures of retirement and care funding faced by older people.

The need for specialist advice has never been so great, In the UK there are 45,000 financial advisers, yet of the 2,000 holding the necessary CF8 qualification, only 150 are active in care fees planning. As my foray through the world wide web this weekend has proved, there is a wealth of outdated and inaccurate information available out there. The face of financial planning in retirement is changing bringing new challenges to financial advisers and product providers in their efforts to ensure their clients may fund the lifestyle they seek in retirement from the wealth accumulated during a lifetime of work. When did you last review not your finances, but your objectives in retirement?

With the government’s Green Paper on Adult Social Care finally seeing the light of day we see a mixed bag of politically neutral proposals that face a longer journey into the light than the Green Paper itself.

As Karen and Tim outline below, the consultation period runs until November, we then await the White Paper, the publication of which may well follow a general election and change of Government.

This may sound an extremely bleak proposition but then, with the Government encouraging what it calls ‘The Big Debate’ on the the reform of Adult Care and Support in England, the electorate have the opportunity to turn this to their advantage.

By engaging in the debate, individual voices may shape the future. The results of the debate will provide fuel for any party’s manifesto into the next election, the *demographics tell us that by 2014 over 65 year olds will overtake under 16 in the UK and the over 65’s are the most likely to vote.  This fact will not escape the attention of any political party.

This presents each and every concerned care recipient, their family, care providers, charities and agencies to  make their feelings known and to drive home the need to make change to the care system a top political priority.

As a Care Fee Specialists, the prevailing comment we hear from  the families and loved ones of those receiving, or about to receive care, is the lack of a single agency to guide them through the practical process, let alone the funding.

The frustrations felt by having to deal with several different agencies, none of which seem to have the ability talk to each other, often leaves relatives drained having repeated the same story 2 or 3 times.  It is hard not to blame the individuals within these agencies but they are simply working within a system over which they have no direct influence.

You may be going through this process now for someone, you may be concerned for yourself or a relative, whatever your circumstances, your opinion matters.  Make your thoughts on the proposals put forward in the Green Paper count, The Wealth Care Partnership encourages everyone to engage in the debate.

I shall be lobbying my own local MP, Jeremy Brown, with my thoughts and am tremendously interested in hearing from you with your comments, indeed I’ll be happy to pass those on for the debate if you wish, you may contact me direct on rene@twcp.co.uk.

Remember you have until 13 November to make your voice heard and to ensure you influence the future of care in the UK, PLEASE don’t miss the opportunity.

*Government Actuary Dept 2003 projections

Background

On the 14^th July 2009, Andy Burnham, the Health Secretary announced in the House of Commons the long awaited Green Paper on Adult Social Care.  He is proposing that everyone in England will have access to a National Care Service that is “fair, simple and affordable”.

This, of course, is only the Green Paper, which sets out the Government’s proposals. Nothing becomes law until the White Paper is ratified in Parliament. Indeed, it is not expected to be effective until 2014.

There will now be a consultation process running up to mid-November and it is expected that a detailed White Paper will be published in 2010.  The General Election will have to take place before June 2010. It will be up to the new Government, perhaps a change in colour, to carry these proposals forward, or not.

Tony Blair, the former Prime Minister, told the Labour Party Conference in 1997 that he did not want children “brought up in a country where the only way pensioners can get long term care is by selling their home”.

Twelve years on, we have finally got the Government’s proposals but we have not got any real progress. Families currently dealing with long term care for their loved ones have to act now to protect their family’s capital from erosion.

Proposals

The Secretary of State for Health is proposing that everyone in England will have access to a National Care Service that is “fair, simple and affordable”.

The National Care Service is aiming to create a level playing field and end the postcode lottery of care services currently affecting those needing long term care.

 The Wealth Care Partnership fully endorses the setting up on such a service and feel it is well overdue. The current situation is totally unacceptable where families are bounced around Government agencies with no-one taking full responsibility of guiding and helping those thrust into dealing with a loved one needing care. It is our experience that the levels of service provided by Social Services and The Primary Care Trust differs widely across the country and this simply should not be the case. We do hope that the National Care Service does not turn into yet another inefficient, expensive and confusing, state-funded institution. It simply must be primarily a “Care” service.

Andy Burnham also claims that everyone in England will be guaranteed:

• Prevention services - the right support to stay independent and well for as long as possible and to delay care needs getting worse. 

Karen Rayner, Partner at The Wealth Care Partnership says “Until the Government are prepared to accept that the NHS is not helping an aging population by treating an illness once it has happened, and only then by the over use of prescription drugs and surgery, there will never be a world without long term illness. Substantial investment into educating the population about preventing illness through healthy living, from school age onwards is what is required. This is a “slow burner” and this is unlikely to happen in my lifetime let alone those currently in retirement”.

• National assessment - care needs will be assessed and paid for in the same way across the country.

“We do hope the National Care Service will remove the current Postcode Lottery affecting everyone who is facing long term care”. Ms Rayner continues, “It is to be remembered that Andy Burnham is talking about care costs and not living costs being covered by the new proposals. Living costs for those continuing to stay in their homes are likely to increase. For those moving into a care home the living costs will need to be paid for by the elderly person and may be higher than if they stayed in their own homes.”

• Joined-up services - all the services will work together smoothly.

Tim Anstee, Partner at The Wealth Care Partnership comments, “If Andy Burnham is able to pull this off, he will be seen as the next Nye Bevon, founder of the NHS in 1948.” He continues, “It is a terrific objective, but 60 years of the NHS has proved that it is totally unworkable.”

• Information and advice – the care system will be easy to understand and navigate.

Tim Anstee agrees that this is a wonderful objective. “There is a confusing maze of legislation and information depending on the levels of care and support an individual needs. People are genuinely confused about what is right for their loved one. Even those who work within Social Services or the NHS can find themselves lost in the maze and it is so difficult to know that you are doing the right thing for the elderly person concerned.”

• Personalised care and support - services will be based on personal circumstances and need.

Is this not something that should already be in place?

• Fair funding - money will be spent wisely and everyone will get some help meeting the high cost of care.

Again, these are wise words and make a good political soundbite. However, the reality is that whatever is paid to the care providers it will not be enough to give a high level of care to all. The Government are proposing they will pay towards the cost of care for all, but care costs vary from provider to provider and the support being offered will not be about everybody getting the same. Many care homes now insist on “third party top up” arrangements whereby family members must fund some of the care fees charged because the homes simply cannot provide the high levels of care their residents deserve, on Government payments alone. We cannot see the proposals changing this position.

It is interesting to note that the Government has been running a scheme in Scotland, whereby the person requiring care is able to receive Personal Care at £153 per week. If a person qualifies for Personal Care they are no longer eligible to receive Attendance Allowance (a form of tax free disability benefit worth up to £70.35 per week regardless of capital and income levels).

The Wealth Care Partnership believes that it is likely that this system will be adopted in England and many will not be able to claim this very valuable state benefit in the future if these proposals are adopted.

The Options

The Green Paper has proposed three options to be consulted on:-

The first option would be a Partnership Service, where the State would offer a proportion, possibly a quarter or a third of the cost of elderly care and the individual would fund the rest privately.

The second would be a voluntary Insurance Scheme, where people invest into a scheme before they have to be taken into care with the State part funding the programme. The Government says around 20 per cent of people could take up this option.

The third option would be a compulsory Comprehensive model, where all those over the age of 65 contribute to a national scheme that would, if necessary, offer everyone full state funded health care.

The Green Paper also states that both a fully state funded scheme and fully privatised programme would not be recommended.

Andy Burnham says the Government has calculated that the Partnership Scheme would cost an individual around £22,000. The insurance scheme could cost between £20,000 and £25,000 as a lump sum and he says the comprehensive scheme will cost around £17,000 to £20,000. He also says these proposals will not result in an increase to National Insurance and says the White Paper will include details for those currently in need of care.

The Wealth Care Partnership’s Tim Anstee states, “Each of the proposals are suggesting a cost of around £20,000, paid either during our working lives or towards the end of it. We would question the quality of care that this would provide. In certain parts of England a typical care home costs in the order of £35,000 to £40,000 per annum (including living costs) and we believe the Government has seriously underestimated the ongoing costs of care. People are living longer and spending many more years in a care environment.  It is also not clear whether social care is included, which is particularly important for the growing numbers of people suffering from dementia, who require no nursing care but cannot live on their own.”

Mr Anstee concludes, “The result of the debate will be released with a White Paper which is forecast to become effective in 2014. It is crucial that those in care now or about to go into care seek advice on the best way to plan for the costs involved. It is my belief that whatever option is chosen, although the Government are proposing to provide some support to all, we are still going to be paying for our care.”

Many elderly people who need long term care are reluctant to leave the familiar surroundings of their home, full of memories and possessions. Some are forced to spend many lonely hours, without any companionship or assistance. Many are subjected to poor care services, neglect and/or abuse. These are vulnerable people, who should be given the level of care they need, so they can retain their dignity and be happy in the twilight of their lives.

Our experience in advising the elderly and their families is that it is common for them to feel they have no choice of who provides care and where it can be received. It is somehow accepted that low standards of care at home is the norm and you simply have to put up with it and continue to pay high fees. The average hourly rate for care at home in England is £14 per hour and this can put a strain on the capital, particularly in difficult economic times.

The fact is, those who are self funding their care (anyone with assets over £23,000 – England 2009/10) have the choice of who provides their care. Anyone who is being funded by their local authority can also choose their care provider, but family members may have to pay towards the additional costs. No-one should accept low standards of care and everyone has the right to replace poor carers with those they trust to care for them properly.

As highlighted in the Panorama programme “Britain’s Home Care Scandal” there are some companies who fall short of expected standards for carers at home and the regulator must raise the bar to ensure services improve dramatically. However, there are already excellent home care providers that we are aware of. These supply fully trained carers, many of whom live with the elderly person concerned providing them with companionship, housekeeping, social and nursing care.

We provide financial advice to those who need to fund long term care. It is even more important now that investments are not performing and interest rates are so poor that those with a little bit of capital who fund their own care obtain advice from a specialist care fees adviser. By protecting the assets from erosion, the elderly person can have total peace of mind, flexibility of who provides the care, and can retain their dignity. They may even be able to leave an inheritance for their families once they have passed away.

We have lots of useful tips and information on our website www.twcp.co.uk and you can request a free guide. The new 2009/2010 guide provides essential information on:-

Planning ahead

Local authority support

Asset disregards & deferred payment option

State benefits

NHS continuing healthcare & NHS-funded nursing care

Local authority funded cases and third party top up

Equity Release

Care at home

Selling or renting the property

Lasting and Enduring Powers of Attorney

Can you afford the care?

Deputyship and the Court of Protection

Immediate Care Plans – A solution to the problem

True stories

This is a very specialised area of advice, so don’t leave it to chance. For trusted advice when you need it most talk to us today.

When people get older and their health deteriorates, it is common that they feel they have no choice about where they receive their care.  Many are resigned to the fact that they may have to move into a care home, even though they may hate the idea and prefer to stay in their own home.

Couples who have been together for many, many years may feel they have no alternative but to live apart, when one of them requires long term care,.  This can often put pressure on the person who is not requiring care to firstly keep their partner at home for as long as possible, providing the care themselves and secondly, when it all becomes too much, to find a suitable care home and constantly travel to visit their loved one.

Placing a loved one into care can be extremely traumatic for all concerned.  Family members can feel terribly guilty and emotional, particularly if a care home is not where the elderly person wants to be.  Leaving beloved pets and personal possessions behind can also be a huge issue for the elderly moving into a care home.

Care at home could be an option for so many people, but this is often not considered.  There are many good quality providers of care in your own home and the cost is not necessarily more than a care home.  The solution could be to have a live-in carer providing companionship , housekeeping and personal care or, simple someone to come around every day to help with certain activities the elderly person is unable to do themselves.

Employing such individuals can sometimes cause a headache and can put people off receiving care at home. Many agencies do not deal with Pay as you Earn (PAYE) and National Insurance on your behalf but that is not true of all of them.

For those who are self funders (assets of more than £22,250 England) and do not have much by way of liquid capital to help pay for the care may need to consider releasing equity from their homes to fund this care.

Immediate Care Plans are a perfect way of paying for such care as it guarantees the payment each month, for as long as the person requiring care lives and payments can be set up to escalate each year to help deal with increasing care fees costs.

Call me on my freephone number to discuss your circumstances and I will be able to put you in touch with the right organisation and discuss payment options - 0800 6528232

Oscars for The Health Insurance industry

The Grosvenor House Hotel hosted the annual Health Insurance Awards on 16th October 2008. The awards evening is often considered the Oscars for the industry, where providers and intermediaries are recognised for their contributions. All entrants have submitted their application to be considered for the award and a shortlist is then made for a panel of judges to adjudicate.

On the night of the awards three nominees for each award are announced with the winner being invited onto the stage to receive the award.

This year attracted the most ever entrants to the best Long Term Care Intermediary category, with over 140 people nationwide hoping to win this prestigous title. The winner of the award for 2008 was Karen Rayner, founding partner of The Wealth Care Partnership. Karen received the award from TV personality Justin Lee Collins and the Chairman of Partnership, Mr Ian Owen, sponsors of the Long Term Care intermediary category.

During the course of the evening I had a discussion with a senior member of Partnership who had been charged with making the shortlist for the judges to consider. I asked him what had impressed him enough to allow Karen to be nominated. He stated that Karen’s case study provided a well documented and clear description of the client process used by The Wealth Care Partnership, which showed the range of options considered on behalf of the client. Furthermore he added that the Guide to Care Fees Financial Planning created by The Wealth Care Partnership is clearly a valuable client publication that is informative without being patronising.

As her business partner for over 7 years and co-founder of The Wealth Care Partnership, I was immensely proud to see Karen win this award. Not only is it a just reward for Karen’s contribution to the industry but it is also an acknowledgement of the care she has for her clients. Karen carefully explains in detail all the benefits that each of her clients may be entitled to and shows respect and consideration when dealing with sensitive issues.

Karen has been in the financial services industry for 27 years but six years ago, decided to focus her efforts specifically on the financial planning needs of elderly people, an area of financial advice which requires a greater level of technical expertise, and additional qualifications not required by general practitioner IFAs.

Of her recent triumph, Karen says : “I am delighted to have won this award just over a year since our practice was set up to provide specialist advice to people needing to fund their own care fees. Arranging care for an elderly relative can be confusing, emotive and stressful for those concerned. There is a general lack of understanding about the financial implications of funding long term care. Sadly, many people could have protected their hard earned capital from erosion if they had been given the right advice and guidance at the beginning of the process.”

She adds: “It is for this reason, I have produced a simple 24 page guide and The Wealth Care Partnership provides a free helpline to those who are confused and worried about funding care.”

The Wealth Care Partnership was formed only 15 months ago and it is wonderful for our business that Karen has won this award so early in our development. It will help propel us to the forefront of Care Fees planning advice and give assurance to others who have not yet come across us that they will be advised by a team of advisers that includes the ‘Best Long Term Care Intermediary’ in the country.

All of us at The Wealth Care Partnership are very proud of you. Well Done Karen!!

Families looking for information on how to fund long term care for elderly relatives, should call the free Helpline on: 0800 652 8232. The Free Guide is also available on this telephone number.

Those who have assets over £22,250 (England - 2008/2009) will not get funding by the Social Services for their long term care.  The rules are brutal for those elderly who have saved all their lives and only have modest savings and the family home.  Most do not have enough income to pay for care and with care fees ranging from around £400 per week to over £1,000 per week, they need to use their savings and/or sell their home.  Here are some tips to help those people who are “self funders”:-

1.  Make sure you claim for Attendance Allowance for the person requiring care from the Department of Work and Pensions (DWP).  You can claim online at www.dwp.gov.uk or print off an application form.  This is not means tested and is tax free.  It could bring in either £44.85 per week or £67 per week - 2008/2009).

2.  Ensure the person needing care is receiving benefits they are entitled, such as Pension Credit.

3.  If a spouse remains in the home, claim for single person occupancy for Council Tax at your local council offices.

4.  The home is excluded for the Local Authority Means Test for the first 12 weeks of needing care.  This is not always made clear.  If the person in care has assets below £22,250 the Local Authority must fund the care for the first 12 weeks.  In certain circumstances the home is excluded from the means test beyond the first 12 weeks.

5.  If your savings are held within single premium life insurance bonds, where there are lives assured on the contract, these savings must be excluded from the Means Test.

6.  You may qualify for Fully Funded NHS Care.  This is not means tested however, you would only qualify if you need long term care following hospital treatment or because of a chronic illness or disability.

7.  If a property needs to be sold, seek specialist help with the sale.  There are companies who specialise in selling homes for the elderly in care.

8.  Seek professional advice from a financial adviser who is qualified for long term care.

9.  Consider purchasing an Immediate Care Plan.  This will pay a benefit to the care provider, tax free, for the rest of your life.  It’s a great way to cap the cost of care and provide peace of mind that you won’t run out of money.  See our other blogs for more information on Immediate Care Plans.

10.  If you haven’t already set one up, get advice on creating a Lasting Power of Attorney which will enable your loved ones to make financial decisions on your behalf if you become mentally incapable of making your own decisions.  You can also set one up to deal with your personal welfare too.

If you would like more information on what to do financially, if someone you love needs to go into care request a free copy of our Guide to Care Fees Financial Planning via our website www.twcp.co.uk.

Paying for the cost of care in difficult economic times.

Going into a residentual care home is a difficult enough decision for the individuals and family concerned, but this decision is becoming even more difficult with the pressures built by the uncertainty in the economy.

Let there be no doubt that care home costs are going to rise above the cost of inflation.

To run a good care home you need trained staff, a quality building with enough space for the residents, good food and a good heating system. Increased regulation has meant that staffing levels have had to go up and these staff, who have typically been offered low wages, are looking for higher pay. Food costs are on the increase and energy bills are rising. As a result the cost of care is increasing.

Faced with these increased costs, the difficulties are further enhanced because there is a slump in the housing market which can effect the sale of the home. Many people are not getting what they thought their property was worth, that is if they are lucky enough to receive an offer. New residents who are going to pay for their own care fees – the Local Authority will only start to fund residents who have capital of less than £22,250 – are often concerned about how they can meet the cost of care and whether their savings are going to last until the property is sold.

It is true that the Local Authority may help some families for the first 12 weeks in care and they do offer an interest free loan facility through a deferred payment scheme. The problem here is that the first option does not last indefinately and with the second a debt is being built up.

Given these concerns our office is now increasingly busy with callers worried about how they can cap the cost of their, or their loved ones, care fees. The answer to this is to purchase an Immediate Care Plan – a special type of annuity to fund the cost of care. If there is not sufficient capital to purchase the care plan but you are waiting for the house to be sold, it is possible to borrow funds from a specialist company.

If you are concerned about the increasing cost of care please give us a call on (Freephone) 0800 6528232 or visit the website www.twcp.co.uk

Good news today for those Equitable Life policy holders who have lost out through the mismanagement of the company and the lack of proper regulation by organisations such as the Department of Trade and Industry, the Government Actuary’s Department, and the Financial Services Authority. Parliamentary Ombudsman, Ann Abraham has stated “The aim… should be to put those people who have suffered a relative loss back into the position that they would have been in had maladministration not occurred”. and she is suggesting that Ministers should set up a compensation fund for policyholders in the Equitable Life.

Equitable’s problems started when its executives mislead their customers into believing their policies were worth more than they actually were and when they couldn’t honor payments under the so called, “guaranteed annuity rate pensions” they tried to pay lower rates to their customers. They were challenged by policy holders and eventually lost their case in the High Court in 2000. The Society was short of the £1.5bn necessary to compensate those policy holders.

Equitable Life conducted its business through their direct sales force from the 60s through to the 80s. I started my career in financial services as an Independent Financial Adviser (IFA), in the 80s and many a time was told by potential clients that they were better served by Equitable Life as they didn’t pay commissions to greedy IFAs and their charges were much lower because of this. So taken in were they by Equitable’s clever marketing and their belief that the products they sold were far superior to any other companies’ products that they wouldn’t consider any other offering. They were often blind to the fact that their salespeople earned large salaries, drove company cars and enjoyed company conferences held in luxurious locations.

Life companies and their Regulators have a duty of care to ensure their policy holders are not mislead and I welcome this report and hope that it all ends well for the policy holders and helps to protect others from a similar fate.