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Equity Release/Immediate Care Plan

Equity Release/Immediate Care Plan

How can I raise capital to meet my care fees but stay in my own home?

Client Circumstances:

  • Mr Thomas is an 84 year old widower.
  • Requires additional income of £10,000 pa to pay for care fees.
  • Has property valued at £180,000.
  • Has savings of £10,000.
  • Does not wish to see savings eroded.
  • Wants to stay in own home and not go in to Care Home.
  • Does not have a Power of Attorney.

Recommended Solutions:

  • Ask Local Authority to carry out a care assessment.
  • Equity Release for £40,000 (Lifetime mortgage).
  • Purchase Immediate Care Plan for £40,000 to pay for care fees.
  • Leave savings of £10,000 for emergency funds.
  • Contact solicitor to have a Lasting Power of Attorney (LPA) made.
  • Make sure Will is up to date.

Benefits from advice given:

  • Receives additional £2,831.40pa (lower rate Attendance Allowance) by having the assessment.
  • Able to stay in own home.
  • Provides ongoing independence.
  • £7,600 pa Income from care plan paid directly to Care agency tax free.
  • Should Mr Thomas need to go into Care Home, house can be sold to pay off Lifetime mortgage and remainder of capital used to top up the Immediate Care Plan if required.
  • Lasting Power of Attorney (LPA) provides someone with authority to handle another person’s affairs.

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