Following both a ‘need’ assessment and ‘financial assessment’ completed by a Local Authority, having established that an individual is a ‘self- funder’ (partially or fully funding their own social care, or where someone is paying third party top ups), the next step is to assess the most appropriate way care fees are to be funded, taking account of current fee levels and likely future increases.
The 9 Available Ways to Pay for Care
There are essentially nine ways available to pay for care. Each has innate advantages and disadvantages and the suitability of each should be measured against the specific circumstances, needs, risk profile, capacity for loss, vulnerability and aspirations of each individual. The best funding solution for any given individual may involve one or a combination of two or more of the following:
1.A Deferred Payment Scheme
2.Rental income from residential property
3.Equity released from residential property
4.Funds released through the sale of residential property/downsizing
5.Liquid assets/cash/income
6.Investments/portfolios
7.Pension income
8.Long Term Care Insurance Product (LTCI)
9.Third Party Top-ups
Things to consider
There are a number of considerations that should be taken into account when making a decision about the most appropriate way to pay for care fees. These include (not an exhaustive list):
1.Your wishes and family considerations
2.The costs of your care and the potential of future increases in these costs (changing needs / inflation)
3.The level of care needed both now and in the future
4.Expenditure that needs to be maintained regardless of care needs
5.Your attitude to risk
6.Government legislation and local authority guidelines
Financial Advice
If you would like to explore any of the paying for care options outlined in this section, My Care Consultant can refer you to an appropriately qualified financial adviser who can provide a recommendation on the most appropriate way to fund any care funding shortfall.
Top Tip: It’s really important to seek financial advice from a regulated financial adviser who holds a specific qualification known as the Chartered Insurance Institute’s CF8 (or equivalent), and preferably an accredited member of the Society of Later Life Advisers (SOLLA), as these are the only individuals who are able to advise on all ways of paying for care, including immediate and deferred annuities (care funding insurance).
You can find out more about the Society of Later Life Advisers (SOLLA) and find a local SOLLA adviser via their website: https://societyoflaterlifeadvisers.co.uk/