Four key questions to ask yourself:
- Do you actually need to pay for care? Check what applies in your particular case.
- If you do have to pay for your care, what help is available from the state? In England, benefits up to £10,000 a year are available; in Scotland the figure is higher still.
- What might be the best way to meet care costs? Work out the shortfall between the cost and the available income, and then look at the capital available.
- What options are there that will help ensure money to pay for care doesn't run out?
If you do have to pay for all or some of your care, the options include:
| Own Income |
You may receive sufficient income from pensions and existing savings and investments or rental income from your home to pay for your care. |
| Family Contribution |
In many cases, your family will be able to cover the cost for you. |
| Savings Accounts |
This includes deposit accounts, ISAs and National Savings.
Very low risk but, as a result, you will have to hope that interest is sufficient and that your capital isn’t eroded too quickly. |
| Long Term Care Plans |
These are specialist insurance plans which, in return for a one-off lump sum payment, pay a guaranteed income for life. If income is paid direct to the care provider, it is tax-free*.
The main benefit of a Care Plan is that it can provide the reassurance of payments for life. This must be balanced against the risk that if the person in care dies early, the capital used to buy the annuity may not be returned – unless additional Capital Protection Insurance is purchased. |
| Investments |
There are many possibilities here from bonds to shares.
However, the most potentially profitable are usually the highest risk and there is no guarantee that values won’t fall. |