Please note this case study is not based on real life events and is intended to show how care can be paid for in a specific scenario. Before such a transaction is entered into we would recommend that advice is taken from a suitably qualified Independent Financial Adviser.
Paul, 82 and Mary, 77 have lived in their house in Derbyshire for 20 years. Paul, who worked as an engineer for all his life, was diagnosed with Parkinson’s disease a number of years ago. His condition has now deteriorated to such an extent that it has been agreed residential nursing care is now needed.
Paul and Mary jointly own their home, which is valued at £150,000 and has no mortgage outstanding. In addition, they have £24,000 of savings in a jointly held building society account, plus small investments totalling £16,000.
Paul also receives pension income of £943 per month from his old employer’s pension scheme and a State Pension.
Paul and Mary are concerned the value of their home will mean Paul has to pay for his own care and that their house will have to be sold to help meet the cost.
They have no relatives who live close by and the thought of having to sell their home is distressing for Mary.
Being inexperienced in financial matters, Paul and Mary decide to see an Independent Financial Adviser (IFA), to clarify their situation and confirm the costs they will have to meet.
The IFA meets with Paul and Mary and he’s delighted to tell them that because Mary will continue to live in their home, the value will be disregarded from the Local Authority’s financial assessment. However, he warns them that should Mary require care in years to come, their home may well have to be sold to meet the cost of care.
Furthermore, the adviser explains that only half of their savings and investments, £20,000, will be included within the assessment.
Paul’s assets will therefore fall between the upper and lower limits of £23,250 and £14,250, which means most of his fees will be paid for by the Local Authority, although he will have to contribute £23 per week from his own income.
Whilst talking to Paul and Mary, their IFA also recommends their investments are reviewed, as well as considering other savings accounts which might provide a better rate of interest. He also suggests they look into applying for Attendance Allowance, which might be available to them given Paul’s deteriorating health.
What has been achieved?
After the meeting, both Paul and Mary feel relieved their initial fears have proved incorrect and they won’t have to sell the home when Paul goes into care.
Given Mary’s good health, they feel confident they will be able to leave their home to their children, as originally intended, without seeing the value eaten up by care fees.
They move forward by contacting the Local Authority to arrange an initial assessment, apply for Attendance Allowance and Mary meets again with the IFA to, review their savings and investments.