The Care Fees Planning Market Immediate Care Plans
- Slides: 33
The Care Fees Planning Market & Immediate Care Plans This Presentation is directed at professional advisers only It should not be distributed to or relied upon by private customers 1
Ash Waldron Account Manager Lifetime Care 0776 8600 826 2
UK Population aged 85+ M I L L I O N S You are here Sources: 1901 -2001 Census data 2002 -61 Government Actuary’s 2006 based projections 3
The need for advice 130, 000 new care home residents per annum 68, 000 need of financial advice every year 75, 000 privately funded 22, 000 Partly self funding 53, 000 Fully self funding 14, 000 get financial advice 7, 000 talk to a qualified adviser 4 4 Source: Oliver Wyman Research
Who buys it? • 87 year old lady with Dementia and failing 3 Activities of Daily Living with a life expectancy of 3. 9 years, just moved into a care home and is selling her house. • Usually purchased by an Enduring Power of Attorney / Lasting Power of Attorney 5
The Cost of Care homes with nursing: The average cost of a private care home with nursing in the U. K. is £ 731 per week Source : Laing & Buisson, Care of Elderly People Market Survey, 2012/13 …. but can cost considerably more. 6
The Cost of Care Domiciliary Care: • A Rise and Retire package – usually 3 hours per day • Typical rate - £ 12 to £ 18 per hour…. . • Overnight sitting - £ 50 to £ 75 per night • Round the clock, 7 days per week package can cost more than a care home… 7
The Care Act 2014 The Care and Support Funding Reforms (April 2016) • ONLY APPLY TO ENGLAND! r r d e • Introduce Longevity Cap of £ 72, 000 e f e • Increase means test threshold to £ 118, 000 D - or £ 27, 000 if the house is disregarded • Introduce accommodation charge of c. £ 12, 000 pa • A Universal Deferred Payment Scheme (April 2015) 8
Means Testing • Assets over £ 23, 250 (in England) which can include your property – No financial support from the Local Authority • Assets less than £ 14, 250 – Full financial support from the Local Authority but – Local Authority set maximum limits for cost of care – All available income compared with this figure – Personal Expense Allowance (£ 24. 90 per week) • Tariff Income 9
Income and Capital Almost everything that you have is taken into account : • Pensions • • • 10 Investment Income Most State Benefits Savings & Investments Investment Bonds Possibly your Home Source : Care and Support Statutory Guidance for Care Act 2014
When home may be disregarded • Spouse/partner still resides in dwelling • Relative over 60 resides in dwelling • Relative with incapacity resides in dwelling • Dependent child under 18 resides in dwelling • First twelve weeks after entering a care home Source : Care and Support Statutory Guidance for Care Act 2014 11
Deprivation • No time limit needed to prove • Negotiation, Mediation & Arbitration • Deferred Payment Scheme or County Court • Writs, Debt & Charging Orders • S. 423 Insolvency Act 1986 Source : Care and Support Statutory Guidance for Care Act 2014 12
State Benefits • Attendance Allowance Higher rate - £ 82. 30 per wk Lower rate - £ 55. 10 per wk • Carers Allowance - £ 62. 10 per wk Nursing Care • RNCC - £ 112. 00 per wk – paid directly to Care Homes only 13 • NHS Continuing Care
The Legal System Solutions for those who are unable to look after their own financial affairs. – Power of Attorney – Enduring Power of Attorney – Lasting Powers of Attorney o Finance and Property o Health and Welfare 14
The Legal System Buckley Judgement – Attorneys have fiduciary duties – Obtain & consider proper advice DENZIL LUSH Senior Judge 22 January 2013 15
Care Funding Solutions • Pay from income • Use investments to produce an income • Equity Release • Deferred Payment Agreement • Draw down capital 16 • Immediate Care Plan
Deferred Payment Agreement Local Authority funded Equity Release 17 Eligibility: • Health – meet LA eligibility criteria • Residential Care only • A house plus less than £ 23, 250 • Enough Equity…. Costs: • Interest rate of 15 year Gilt Rate + 0. 15% • Current rate – 2. 25% - reviewed January and June • Plus setting up and admin costs
Immediate Care Plans For those already requiring care. • • 18 Single Premium Regular Monthly Benefit Care at home or in a Care Home Paid for life - Guaranteed Benefits can be indexed Premium Protection Option Tax free - paid to registered care provider Taxable - when paid to policyholder
The Providers • Friends Life (Aviva) • JRP 20
The Products Immediate Care Plans and Deferred Immediate Care Plans 21
Immediate Care Plans Underwriting and the Common Application Process 23
The Application Process Illustration Common Application Medical Screenings Direct Single Application GP Report Care Home Report Underwriting Issue Terms Release Business 24 17 Weeks
Meet Sally 25
Moving to a Care Home • Sally is aged 85 • Currently in a wheel chair • Suffered a stroke last year • Slight short term memory loss • Unable to look after herself at home 26
Current situation • Current Income from all sources £ 15, 440 net p. a. • Care Fees and expenses £ 35, 200 p. a. • Shortfall in income £ 19, 760 net p. a. • Capital £ 200, 000 - from sale of house and savings These figures are for illustrative purposes only. 27
Sally’s concerns……. • Worried that she is a burden to daughter • Choice of care • Would like to be financially independent • Worried about using up all her capital • Would like to leave an inheritance 28
Daughter’s concerns…. . . • Mother secure and well looked after • Capital running out • Having to move her mother again • Her grandmother lived to 92 • Although suffered a Stroke still very strong 29
Options available • Invest the capital to produce income. Achieve a typical 3. 5% net return on £ 200, 000 = £ 7, 000 p. a. • Move to a cheaper care home. Current Income £ 15, 440 + £ 7, 000 = £ 22, 440 p. a • Meet the care costs from £ 200, 000 capital. Risk the capital being used up. These figures are for illustrative purposes only. 30
Solutions • Purchase Immediate Care plan – Cost a lump sum of £ 88, 603 – Provides £ 19, 760 p. a. to the Care Home increasing by RPI • Tax Effective – Tax free benefits paid to registered care provider • Surplus capital of £ 111, 397 – £ 11, 397 for immediate access – £ 100, 000 invested for legacies These figures are for illustrative purposes only. . 31
Sally’s views • Choice of care • Financially independent • Flexibility for fee increases and personal spending money • Not a burden on family • Should be able to leave an inheritance 32
Daughter’s views • Mother in Care Home of her choice • Predictable net income • Additional capital for fee increases • Inheritance 33
In Summary • Care Fees Planning is very rewarding BUT • Requires considerable knowledge and expertise…. • If you don’t know what you’re talking about – REFER! 34
Further Information Full details of our range of products & services are available on request This presentation is based on our understanding of current Law and HM Revenue and Customs practice which could change. Friends Life Limited Head Office: PO Box 582, Bristol BS 99 5 SN. Tel 0345 30 30 430. Facsimile 0173 242 5421. Website www. friendslife. co. uk/lifetimecare An incorporated company limited by shares and registered in England Wales, number 4096141. Registered office: Pixham End, Dorking, Surrey RH 4 1 QA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. As part of our commitment to quality service, telephone calls may be recorded. Friends Life is a registered trade mark of the Friends Life group. 35
- Market follower
- Positioning and targeting
- An immediate and temporary care to a person
- Apgar score 8
- 5 initial steps of newborn care
- Objectives of newborn care
- Primary secondary tertiary health care
- As evidenced by nursing
- Af form 357 family care plan
- Apple health managed care plans
- Nursing diagnosis of gout
- Zeta phi beta images graphics
- Mdel fees
- Meed wced
- [email protected]
- Adv vinod sampat
- Portland state university undergraduate tuition and fees
- Wells fargo payment gateway
- Ubi fee verification
- Oakridge ib
- Fidelity personal trust company fsb
- Little flower primary school thohoyandou
- Lmaa fees
- Horizontal analysis example
- Primera ley de la termodinamica en sistemas abiertos
- Achd impact fees
- Withdraw cash for personal use journal entry
- What is tuition
- Uenr today
- Language academy
- Lions club organizational structure
- Mount litera zee school besa nagpur fees structure
- Leading university sylhet tuition fees
- Life membership fees in income and expenditure account