…Families worry over care home fees (continued)

The Telegraph has reported that most people they surveyed were completely unaware of the different financial products available to help them with long-term care costs. In July this year the Financial Times published an article on this topic. They highlighted that 40,000 individuals are forced to sell the family home each year. One way of tackling this is to look into insurance annuities, which pay out income in life to pay for care home fees or whole-of-life policies, which pay out on death.

Whole-of-life policies

The Financial Times say that the government have announced plans to introduce a “pay when you die scheme”. This scheme should see less families forced to sell the family home, instead a council loan would be made available for care fees. This would then be payable on death either through a charge over the family home or using a whole-of-life-policy. From 2015, councils will be able to charge interest on these loans. This of course can rapidly accrue and if secured against the home can eat into the capital. If however a whole-of-life policy has been taken out the proceeds of the policy could be used to repay the loan leaving the home untouched.

Although we are unable to provide financial advice if you would like advice on the legal position our Private Client department can provide this and work in close conjunction with independent financial advisors.

Please call us or drop us a line if you'd like to arrange to discuss your situation.