How can I meet increased care costs and downsize from my large home to more manageable sheltered accommodation?
- Mr Rogers is 88 years old and does not need nursing care yet, but does need someone to help with general activities of daily life.
- He has a large 4 bedroom house which is becoming too much for him and is looking to move into sheltered accommodation.
- Once his State and other pensions are taken into account, there will be a shortfall to pay for care fees of £15,000 pa.
- He is expecting to have £180k of capital from sale of property and concerned that the capital will be eroded over time.
- Ask Local Authority to carry out a care assessment.
- Once house has been sold purchase Immediate Care Plan for £60k to cover shortfall for care fees.
- Hold £36,000 on deposit to cover for emergency/rainy day.
- Suitable investment with remainder of capital for growth.
- Ensure have Lasting Power of Attorney in place (LPA).
- Make sure Will is up to date.
Benefits from advice given:
- Receives additional £2,831.40pa (lower rate Attendance Allowance) by having the assessment.
- Income from Care Plan paid directly to care agency tax free.
- Care annuity pays £12,500 pa increasing by 5% for life.
- If Mr Rogers’ care needs increase substantially, can use some of his capital to top-up care annuity.
- Lasting Power of Attorney (LPA) provides someone with authority to handle another person’s affairs.
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This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.