Long-term care could be one of the most expensive purchases people make after buying a house

Most people wouldn’t take out a mortgage without financial advice, yet many don’t think about this when it comes to paying for care. Good financial planning is vital.

There are a wide range of options available when paying for care and it can be difficult to know what is right for each person. Carewise recommends letting the people you work with know how the scheme can work. Carewise was set up by West Sussex County Council, the Society of Later Life Advisers (SOLLA), Age UK West Sussex and West Sussex Partners in Care to provide trustworthy, independent advice about care and support and the most cost-effective funding solutions.

Carewise includes a panel of locally-based independent financial advisers specialising in planning for later life; all are members of SOLLA. They provide advice from across the market and can help people to preserve their savings and assets for as long as possible.

To provide people with added confidence they are all approved by Trading Standards’ Buy with Confidence scheme, Disclosure and Barring Service checked and trained in safeguarding adults.

Here’s how financial advice from a Carewise care fees specialist helped one West Sussex family.

Grace was 84 when her daughter and lawyer asked for advice on paying for long-term care. Grace suffered from physical problems and mild dementia and required full-time residential care. Grace owned a house and after it was sold she had assets of £210,000.

We estimated that if Grace did nothing her money would decrease and after seven years she would need her care paid for by the local authority. Council funding would be lower than the care home fees, meaning a family member would need to pay the difference.

We considered a number of options. One was to arrange an immediate care plan for a premium of £138,000. It would pay her care provider £2,100 a month, which would increase each April by 5% and be payable for her lifetime. However, this option would only leave £72,000 of her estate and Grace and her family were uncomfortable with the idea that such a large sum could be lost if Grace died soon after buying the plan.

Instead, we agreed that Grace should buy a five-year deferred care plan at a cost of £26,100. This plan has the same long-term benefit as the immediate plan, but will only pay out if Grace still needs care in five years’ time. In the meantime she funds the care from her assets. Overall the long-term cost of this option is greater but Grace and the family were happier with this solution as they felt that the extra money had been spent on Grace’s care.

Once paid, the premium can never be returned, but Grace and her family found that the plan gave them great peace of mind. Grace knew that the income from the plan would be there as long she lived and she would still have money to leave to her family. Upon Grace’s death, she will leave an estate between £184,000 and £67,000, depending upon how long she lives.

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