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 Indeed I noted the Governments own website, Diectgov, publishing outdated figures with regard to the Means Test Threshold.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?