Few people will be able to afford to pay for long-term care purely out of their pension and other regular income. But it makes financial sense to arrange your investments to produce a steady stream of income to pay for care.
For example, if an individual going into care has no dependents, they could use their property to produce a rental income. This income could be used to help cover the cost of care, and the property could still be passed on to their family.
Alternatively, if a property is sold, the money from the sale could be invested in a variety of areas to produce a regular income stream to help pay for care. If you or your family have chosen to sell your property to generate income you should seek professional advice to fully understand the options that best suit your situation.
- You may be able to retain your capital, allowing a lump sum to be saved and passed on to your family.
- You may be able to retain your property and pass it on to the next generation.
- Investments could provide you with more flexibility than other forms of long term care planning.
- Returns from investments are not guaranteed and can be volatile. The income produced may not cover the whole cost of care fees.
- You may have to pay tax on income for some investments. Seek professional advice to ensure the income generated is as tax-efficient as possible.
- You may run out of money. If you live for longer than expected, there is a real possibility there will be insufficient capital to continue funding your care.