Calculating the likely cost of care is difficult now but Government proposals set out in the current Care Bill make the process even more complicated. Although a £72,000 cap on the amount people will pay for care is being introduced the effect is not straightforward and in practice relatively few people may actually benefit.
Having some idea of likely costs is critical. Nobody wants to run out of funding and have to move, perhaps to a care home of the Local Authority’s choosing. Knowing what costs you may incur can help you decide how you invest your capital; whether or not you sell your home and what kind of care home you can afford to in the first place.
The problem is the sheer number of variables: how much care costs in your area, what level of care you need, what state benefits and funding may be available and so on. The changes being introduced by the Care Bill make the calculation more difficult as more factors can come into play – in particular the extent to which the fees you pay count towards your cap.
‘PayingForCare’ (a not-for-profit national information and advice service and member of the Age Action Alliance) has updated its online calculator to include these variables. Go to http://www.payingforcare.org/care-cap-calculator and you can calculate how long it will take you to reach your £72,000 care cap and how much you are likely to spend on other costs before and after you reach that point.
There will be some “unknowns”, particularly what happens if your needs change whilst in care, what state funding may be available to you and the length of time you are likely to spend in care. But this handy calculator at least provides a basis for future financial planning. It might prompt you to consider reviewing your investments, trying to improve your income or tax position or consider an immediate care needs annuity as part of your planning.
What we can be sure about is that, for many people, care will be a huge cost and the proposed cap will not be a panacea. The Government has already said that anyone living in a care home will be expected to fund living expenses of £12,000 a year for life on top of what they pay for care. The cap will only apply to care fees and not these living expenses. People may also find themselves topping up what the Local Authority will pay – both before and after their care cap has been reached.
Professional specialist advice may be required to explain and supplement the headline figures the Paying for Care Calculator generates. Within our team we have Financial Planners who have been accredited by the Society of Later Life Advisers to give you any financial advice which may be required. We will be very pleased to offer you an initial appointment at no charge to explore how we may be able to assist.