Planning for the future

Many of us put off thinking about care planning until a situation becomes urgent. However, taking the time now to consider your wishes and preferences can make all the difference—ensuring you get the care you want while easing the burden on your family. Without this forward planning, relatives may have to make quick decisions on your behalf during a crisis, which may not align with your long-term wishes.

Understanding the Care Act and Future Changes

The Care Act 2014 introduced key changes designed to help people with care costs. From April 2020, a ‘cap on care costs’ was set to provide protection from spending everything on care. This means there is a maximum amount you will need to pay towards your eligible care needs, making financial planning easier.

Currently, if you have savings or assets worth more than £23,250, you are expected to fund your own care. However, with changes to the threshold, more people will be able to access financial support. That said, it’s important to understand the finer details of the act, as there are still costs involved, which could affect your savings.

Who Can Help with Funding?

If your savings or property assets exceed the threshold, you will be considered a self-funder. Around 75% of private healthcare funding currently comes from people’s personal savings, and many people don’t fully understand the long-term costs involved at the outset.

While it may be tempting to opt for the cheapest care available, this isn’t always the best choice. Lower-cost services may offer less flexibility, with visits scheduled for the provider’s convenience rather than your own. Instead, looking at the overall value of care—including quality, reliability, and the additional support offered—will help you make an informed decision that prioritises your needs.

Self-Funding Options

For those required to self-fund, there are financial products that can help manage care costs, including:

• Immediate Needs Annuities – A one-off lump sum purchase that provides a guaranteed, tax-free income directly to your care provider for the rest of your life. These annuities are tailored to your health and age, offering peace of mind that your care will always be covered. However, they are a long-term commitment and cannot be refunded once purchased.
• Equity Release – If you own your home, you may be able to release money from its value to help pay for care. While equity release had a poor reputation in the past, modern plans are now highly regulated and offer a viable option for those wishing to stay in their own home while funding care.

If you're considering either of these options, seeking independent financial advice from a specialist in care planning is strongly recommended. They can help you explore solutions that protect your savings and inheritance while ensuring your care needs are met. In this regard, SOLLA, the Society of Later Life Advisers, is an organisation that focuses on providing financial advice to older people. Details about SOLLA can be found here.

Getting Help with Funding

If you need financial support, your first step should be speaking with your GP or local authority to arrange an assessment. Depending on your circumstances, you may be eligible for help through:

• NHS Continuing Healthcare – If your care needs are primarily health-related, the NHS may cover the full cost of your care. However, eligibility criteria are strict, and an assessment is required to determine if you qualify.
• Local Authority Support – Your local adult social services team can conduct a financial assessment to determine if you qualify for funding. If you do, they will allocate a care provider from their preferred list.
• Direct Payments – If you qualify for local authority funding, you can choose to receive direct payments, giving you control over selecting your preferred care provider. If your chosen provider’s fees exceed the allocated funding, you can opt to ‘top up’ the difference privately.

Click here for more on information on funding your care.