September 14th, 2014

Long-term care options

A crisis has developed in the funding of long-term care for the elderly. As the proportion of elderly Britons continues to rise, demand for care is exceeding supply. According to the Association of British Insurers (ABI), one in three people will require care, so there’s a good chance that it will include you. However, payment for long-term care has become an increasingly pressing problem, and the amount of financial support that you can expect from the state will differ depending on whether you live in England, Wales, Scotland, or Northern Ireland. You have various options when planning how to finance your long-term care. There are different types of long-term care plans available; for example, “immediate needs annuities” can help to bridge the gap between your income and care costs. You could also consider using your pension pot to purchase an enhanced annuity, which will pay a higher level of regular income if you have a medical condition or lifestyle that is likely to reduce your life expectancy. Alternatively, your home could provide a source of finance: you might wish to downsize to a smaller house in order to free up capital. You might also consider an equity release scheme; however, these should be approached with caution, as they don’t necessarily offer good value for money. Above all, it’s vital that you speak to a financial adviser who can advise you on the course of action that suits you best.

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