IN THIS EDITION
• IHT & Long Term Care Planning• PAYE Penalties
MAKING PROVISION FOR LONG TERM CARE
As we live longer the need to make some provision for our long term care, whether in our own homes or in a care home, becomes more important.Any sort of financial planning for the costs is difficult because firstly we do not know if we are going to need it, and secondly if we do how long we will need it for. In addition changing government policy also adds another element of uncertainty. People provide for the costs in a number of different ways but it is not generally known that it is possible to insure for these costs with regular premiums like most other insurances, but much more commonly used is a special type of annuity.
The immediate care annuity is something you buy when you go into care. In return for a lump sum which you pay to the insurance company, they pay a monthly sum direct to your carers for as long as it is needed.
The benefit is certainty of cost – you know what your care will cost you up-front as one lump sum and there is no fear of running out of money because you live a long time in care. It also allows you to decide what to do with the rest of your money that is not needed for the care fees, so you can help children or grandchildren without the fear that you have given away money you will eventually need for yourself.
Of course, the downside to these annuities is that if you only survive a short time in care it will have been expensive, but for many of us the fear of having lost out because we paid highly for a short period is far less than the fear that we will run out of money for care fees because of a long period in care. The length of time in care is often much longer than many of us would guess.
