7 May 2019
“You don’t know what you don’t know!”
Nicky Cave is a Care Fees Adviser and Managing Director of Eldercare Solutions Ltd and is an Advisory Board member of the Society of Later Life Advisers.
In offering advice for funding long-term care we always find that people are unaware of a care fees annuity. Below we share an experience of a family looking for care for their loved one at Bucklesham Grange in Ipswich. “When we first visited Bucklesham Grange to see if it was suitable for Mum, we picked up an Eldercare Solutions leaflet, entitled ‘paying for care’. To be honest, we already knew that Mum would be self-funding her care as she had a property and a reasonable amount of savings so we didn’t really expect the leaflet to tell us much. Therefore, we read with interest that it is possible to ‘insure’ care home fees using a product called a ‘care fees annuity’. Our family is quite familiar with the financial world and understand perhaps more than many families about investment options and products but this was not something we were previously aware of.
“Very soon after Mum moved into Bucklesham Grange, we called Eldercare Solutions and chatted through Mum’s situation in broad outline. They were able to explain to us how the product worked, roughly what they thought it might cost and how the process would work if we wanted to get quotes.
“On the face of it, Mum was in a good financial situation but, actually, when the calculations were done, we could see that it was possible the funds could run out in the event of Mum living in care for several years, even if she invested it to generate an income. This did cause us some worry and concern as we did not want to be forced to reassess Mum’s living arrangements should the financial situation become difficult. We felt that the care fees annuity could be a great way of providing peace of mind for us all as it would provide a guaranteed income for the rest of Mum’s life, no matter how many years that might be.
“Acting as Mum’s Attorneys we felt that it was our duty to take independent, specialist advice about the best way to use her capital to pay for future care fees and so we instructed Eldercare to start the quote process.
“This involved some form filling in on our part. We gave consent for Mum’s GP and Bucklesham Grange to be contacted to complete reports about Mum’s health and care needs. All of this could be done without Mum’s involvement. We felt it was very important for Mum to be able to focus on settling into her new home. It was about five weeks before our Eldercare adviser received underwritten quotes from the insurance companies, but we were kept fully informed by the team at Eldercare. The adviser then sent us a comprehensive, easy-to-understand report about Mum’s funding options, which we were able to discuss and review as a family.
“We decided to buy a care fees annuity, which would provide sufficient income to plug the gap between the care home fees and her Attendance Allowance and pension income. This means that we will never have to worry about Mum’s funds running out. A bonus is that a little under half of her estate was ‘ring-fenced’ so her wish to leave an inheritance was also fulfilled.
“Had we not made the call to Eldercare Solutions, we would not have known about this funding option. Even if it had turned out to be too expensive, it would have been worth making the call just to learn more about our options so that we could make a truly informed decision. It won’t be appropriate for everyone but better to know about it, seek appropriate advice and make an informed decision. We are glad that we did exactly that.”
Sandra Price and Rosemary Smith
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