Navigating Financial Planning for Long-Term Elderly Care
Financial planning for long-term care is essential as it enables you and your loved one to choose a suitable care option that will be able to maintain and continue without the strain or stress on anyone’s finances. However, the planning process can be complicated as there are many parts to it.
From understanding costs to researching grants and government funding to developing a sustainable financial plan, there are many elements, and on top of these is navigating your potential care options.
At Primrose Lodge Southbourne, we have been helping families develop their unique financial care plans for years. Our staff are highly knowledgeable about the options available and ensure this is a topic covered at every viewing of our care home.
In this blog, we aim to walk you through the intricacies of financial planning for elderly care, sharing what you need to consider and research and steps you will need to take.
Understanding the Costs
Of course, you can’t start planning without understanding what you are planning for, so you will need to begin by getting to know the various costs involved in long-term care.
These will include the cost of care (at home or in a care home) and additional services.
Additional costs you might encounter could include:
- Chiropody
- Hair care and grooming
- Laundry
- Supply of toiletries
- Outings and trips
Costs will likely vary depending on the care options you are looking at. If looking at care homes, they will vary on the type and size of the room and facilities.
Assessing Financial Resources
Once you know roughly how much you might need, you will need to understand how much your loved one has.
This will look at what assets your loved one has, such as savings, pensions and investments, as well as equity in property.
You will need to calculate how much it all comes to so you can determine a realistic care budget.
Government Assistance and Initiatives
There are several care funds and government initiatives available in the UK that you can explore once you roughly know what your loved one has available.
Researching these can get complicated because each initiative has a set of criteria your loved one needs to meet to qualify for it. They also include detailed applications that need time to be completed.
Funding options include:
You can get help and guidance when exploring these options from a number of professionals.
- Financial planners
- Solicitors from The Society Of Later Life
- Age UK
- Local Authority
- Money Helper
Immediate Needs Annuity & Private Insurance Options
In the UK, there are a few insurance options that you can utilise to pay for care.
Several insurance companies offer long-term care insurance, where you pay a monthly premium, and when you need care, the insurer pays a pre-agreed amount to cover parts or all of your care.
This isn’t a popular solution as there are limited providers, and it isn’t guaranteed that the policy you have will cover all of your care needs.
A more popular option is an Immediate Needs Annuity, also known as a Care Annuity. This is where you make an initial lump sum to a provider, and they make regular payments to help pay for your loved one’s care for the rest of their life.
This means money coming in is guaranteed. However, the initial payment can be expensive.
Family Contributions and Support
You can also explore the potential of family members contributing or supporting the care payments.
In many care homes, they will accept “top-ups”. This is when government initiative, local authority funding or other methods of paying don’t fully cover the care cost, so a family member pays the remaining amount.
In order for these to be an option, you must have open and honest discussions about care costs and support.
Legal Considerations
While you are investigating your funding options and working out your loved one’s available assets, it is important to consider potential legal needs for the future.
Two main legal documents worth putting in place include a Will and a Power Of Attorney. These ensure that financial responsibility is put into the hands of a trusted relative or friend.
Planning for Future Changes
Care needs will develop as your loved one ages; this could mean an increase in care costs.
Therefore, it is important to consider holding back a set amount as an emergency fund or thinking about paying into private care policies to cover this situation should it arise.
Working with Financial Professionals
Navigating care costs and funding options for long-term care can feel overwhelming, especially when it is being done on top of researching care options for your loved one.
It is always a great idea to seek professional help as they will be able to explain the intricacies of each option and your plan in a way that you will understand.
Working with a professional will enable you to put together a tailored financial plan that suits the care needs of your loved one and utilises all the available funding options.
If you are in the process of putting together a financial care plan and are a little stuck, don’t hesitate to get in touch with our team.
We can point you in the direction of many helpful resources and professionals.
Call us on 01202 429514 or arrange a visit to our care home to discover our long-term care and facilities and speak to our knowledgeable team about your financial plan.