A report released today by the Local Government Information Unit warns that 1 in 4 pensioners who fund their own care fees will end up losing their home and almost all their savings. It states that as many as 40000 people who fund their own care fees will see their assets depleted to little or nothing.
Self funders typically spend 4 years in residential care with 12% staying there for 8 years. At an average annual charge of £27000 this can cost a minimum of £108000 up to a maximum of £216000.
Those without assets and savings above £14000 are funded totally by the Local Authority and partly if they have assets and savings between £14000 and £23250. After that the full cost must be found by the individual .
Those who have saved all of their working lives can now find that they eventually finish up with nothing if they have to go into care at the latter part of their lives. They will find themselves in a similar position to those who have not been so prudent.
This is why a properly constructed Will is so important. Every married couple who own property should make a Will to include a Property Protection Trust or an Asset Protection Trust either of which will ensure at least one half of the value of the property will reach ultimate beneficiaries. The cost of doing this is often less than one week’s care fees.
For single people.widows or widowers a Lifetime Property Protection Trust can ring fence the residence for life and again provide some comfort for beneficiaries. This must be done well before there is any possibility of having to go into care. The cost of this route is equivalent to approximately one month in care.
The use of Wills and Trusts can prevent future pensioners from losing all their hard earned savings if they finally have to resort to Care Homes .