2018 Guide to Later Life Care: Passing on a legacy

Choosing the wrong approach to later life care can bleed families dry financially

Looking after the care needs and financial affairs of your loved ones as they grow older presents a complex, sensitive set of challenges. Under the changes proposed in the Care Act 2014, which received
the Royal Assent in May 2014 and which came into effect in April 2016, the funding of elderly care changed significantly.

Passing on a legacy

One of the perceived benefits under the new system is that eligible care costs are to be subject to a lifetime cap from 2020. This is not as beneficial as it may seem, however, because the cap does not include the ‘board and lodging’ element of the care costs, which currently normally exceeds £1,000 per month. Furthermore, the legislation provides that these costs may be varied in line with average earnings.

Destroying any hopes of passing wealth

Within a matter of only a few years, a family’s assets built up over generations can disappear in the payment of care home fees. Choosing the wrong approach can bleed families dry financially, destroying any hopes of passing wealth on to the next generation. Increasingly, those in the sandwich generation (a generation of people who care for their ageing parents whilst supporting their own children) also need to be considerate of their future needs, the costs and not becoming a burden on their own children.

Later life care is a very broad term, covering everything from temporary placements for those who need to recuperate from a fall or illness to round-the-clock dementia care and end-of-life palliative care. You or a family member may need different types of care at different times in life, so it is important to build in flexibility to meet changing needs.

Financial picture and approach can change

Depending on what type of care is needed, the financial picture and approach can change. Some forms of benefit are only available to those with very severe medical needs, while different rules apply when care is likely to be temporary rather than permanent. There are also some forms of care available at home, which can be a less costly alternative to full residential care, depending on the needs of the individual, while warden controlled or sheltered housing can also be an option.


Helping to understand the process and advising on a range of options

None of us know what our future holds. However, with the right planning, we can be prepared. For your peace of mind and to find out how to manage finances for later life care – whether for yourself or a relative – we can help you understand the process and advise on a range of options. Please Contact Us for more information.

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Content of the articles featured is for general information and use only and is not intended to address an individual or company’s particular requirements or be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.