Many of us (me included!) fear a diagnosis of early stage Alzheimers.  In most cases it is just that we are getting older.  Perhaps the neural pathways are getting a bit confused (well, that is my theory as the doctor just says my life is too hectic!)

The first reaction to even a suspicion of early onset Alzheimers disease should be to ensure that our legal planning is up to date and appropriate.  That means:

1. An up to date Will.
2. Lasting Powers of Attorney.
3. Asset Protection – because it may not be effective after a diagnosis of early stage Alzheimers.

Hopefully it won’t be an issue, but around half of us will benefit from Asset Protection – well, our families or other beneficiaries will.  Early stage or onset Alzheimers is far from the only thing which can cost your family pretty much all of you hard earned wealth.  Accidents, law suits, care fees, divorce, bankruptcy, creditors, legal claims by so called dependants and many more.  Early legal action is always prudent whether you are 21 or or 101.  And it isn’t uncommon for widows/ widowers to remarry, then die and all their assets then go to the “new” family.

Here are some site which may be of benefit if you are concerned about early stage Alzheimers, and a couple of video discussing research on Alzheimers and precautions you can take.  Our booklet, Asset protection Secrets gives a brief overview of UK legal planning.  We strongly recommend that you download a copy.

• Blood test for Alzheimer’s disease in early stages on the Alzheimers Society Website - certainly one of the most helpful.
• Alzheimers disease stages HelpGuide.org is a US site but none the less helpful for that.
• This article is about Alzheimer’s disease and other types of dementia. It presents information for patients, family members, and other caregivers. It talks about the effects Alzheimer’s disease can have on you, your family members, and your friends. This article describes the early signs and symptoms of Alzheimer’s disease. It’s not about treating Alzheimer’s disease, nor should it be construed as medical advice. Consult your doctor or other medical professional immediately if you suspect that you or a loved one has Alzheimer’s Disease.
• This is another US video talking about the benefits of excercise in early stage Alzheimers (oh dear!)

• Dementia Research

Care Fees Funding has dropped by over 11% in a time of increasing need and costs according to a BBC report:

“The number of elderly people in England getting council-funded care has fallen by 11% in the last two years, figures obtained by Labour suggest.

Freedom of Information responses from 121 councils showed they provided free care to 59,056 over 65s in 2011-12, down from 66,342 in 2009-10.”

Other reports on care fee funding from the BBC indicate that families are risking prison sentences for fraud in an attempt to avoid Community Care Tax. Why they should resort to criminal activity when there are usually perfectly legal ways of funding care fees in a more effective way for both the client and the eventual beneficiaries.  Fraud is dangerous and corrosive as the BBC report indicates.  Any family member unhappy with being implicated in criminal activity can have awful effects on their conscience.

When in 98% of cases it is perfectly easy to protect both financial and brick and mortar assets, why risk a criminal record? Care fees can be funded far more effectively when you download our FREE Asset Protection Guide.  Spend a few minutes reading it.  Then contact us on 0800 298 5208 for a personalised solution based on your own situation.

Unlike some who provide solutions which appear similar, we don’t employ salespeople, so you have no fear of someone turning up on your doorstep doing a hard sell.  Our job is to make sure that peoples Legal Planning is cost effective, relevant and up to date, and it is a service we offer to the benefit of everyone from new born babies to helping the families of former clients for anything up to 125 years after they have passed on.  Our plans can form the basis of a “Family Bank” which can help the family through good times and bad for up to 125 years.   But that is just one of the options.  Why not contact us to see what we could do to help the generations of YOUR family.

CARE FEE FUNDING – Why risk Prison?

Bad health in retirement can be expensive in more ways than the Pru are perhaps mentioning.

The biggest penalty of pensioners bad health (which is far from rare) is the loss of their life savings and home to pay care fees.  Community Care Tax is far higher than inheritance tax in that it can wipe out pretty much the whole of your assets.  Inheritance Tax just takes 40% off the top slice (if you haven’t taken precautions.)

If you would like to save money and time on probate, and protect your assets from total loss, ask for a copy of Asset Protection Secrets – it is free and without obligation.

Here is the Pru’s take on ill health in retirement.  If you want to find an Independent Financial Adviser to discuss the financial aspects of bad health in retirement, click the link.    Our expertise (and booklet) covers primarily the legal aspects.

PENSIONERS FAIL TO COUNT THE COST OF
ILL-HEALTH IN RETIREMENT

• ·        Prudential’s Class of 2012 research highlights lack of long-term planning

Despite the on-going debate about the need to fund long-term care for the elderly, only one in five people planning to retire this year have made financial provision for ill-health in retirement, new research from Prudential shows.

Its ‘Class of 2012’ study into the finances and expectations of those planning to retire this year shows that just 20 per cent have set money aside for any care needs. This drops to 16 per cent among those aged 65 plus.

Prudential’s research also found that less than half (45 per cent) of this year’s retirees have planned for the fact that they may need more income in retirement as they get older.

However, funding long-term care has never been more important. Although average life expectancy for men over the age of 65 is 17.6 years, and 20.2 years for women, healthy life expectancy is just 9.9 years for men and 11.5 years for women.

Vince Smith-Hughes, retirement expert at Prudential, said:  “People retiring this year realise that living longer may mean they will need a higher income as they get older, but few of them have made the connection between the risk of ill-health, and needing money to pay for healthcare.

“Although life expectancy is increasing, healthy life expectancy is flat-lining. With the average person now working until they are aged 63.4, people are enjoying fewer healthy years in retirement.

“Spending the first few years of retirement trekking in the Andes and running around after grandchildren may be a reality for some, but it is important not to forget that health will worsen as pensioners get older.

“Making financial provision for the possibility of ill-health in retirement should be an integral part of the retirement planning process.”

Across the country, those planning to retire this year in Wales are the most likely to have prepared for the risk of ill-health in retirement (32 per cent), while those in the East of England (7 per cent) are the least prepared.

The Government is currently considering recommendations from the Dilnot Commission on the Funding of Care and Support which, in July 2011, proposed that an individual’s contribution to social care should be capped at £35,000, with any additional costs funded by the State.

Social care is a far worse tax than Inheritance tax – and like IHT, it is largely controllable as part of a normal, prudent probate and asset protection plan.  Many firms sell “Social Care Cost Prevention” packages which attract the attention of the authorities (who are just beginning to wake up to the billions of IHT and other taxes legally avoided every year!)

There are many advantages to asset protection strategies, and ring fencing your assets from care fees is just one of them.   In the long run, these strategies should be an investment not a cost. Better still, our strategies do not for the most part prevent you from topping up your care fees to ensure you have decent accommodation, food and care.  Many strategies will backfire by leaving you solely at the tender mercies of cash strapped Local Authorities whose main interest is getting social care at minimum cost not maximum standards.   Wouldn’t it be comforting to be sure that your fees could be topped up if the need arose?

Minimising the cost of Social Care to Your Family

For details of our packages which cover Social Care issues amongst many others, click the link.  Children and grandchildren need all the help they can get these days with getting on the housing ladder and paying university loans.

To watch a brief BBC video on the subject of Social Care go here.

Just recently, seventy-eight organisations, including the Alzheimer’s Society, have jointly written an open letter to the Prime Minister to raise their concerns about social care in England being chronically under-funded and in crisis. The letter asks David Cameron to push forward with reforms of social care, something Tony Blair started on in 1988 :>).  Personally, I can’t see the slightest chance that social care will be properly funded in my lifetime (61 at the time of writing) – if ever.

The government acknowledges the system needs to be changed, and says cross-party talks are underway. See comment about Tony Blair above!

Social Care – Greater Benefit, Lower Cost to Your Family

It will cost you nothing to look through our booklet on Asset Protection, and working with us to put sound strategies in place could massively improve the quality of your or your parents final years, and leave a legacy for future generations of your family (or favourite charity.)

Order your copy now.

(For information on improving your and your families situation regarding long term care, please read our little booklet Asset Protection Secrets. If you want information on equity release, enhanced annuities etc and don’t have a financial adviser, we will be pleased to introduce you to one.  We don’t offer financial advice ourselves.)

Research undertaken by independent financial research company Defaqto shows that 71% of advisers believe that providers should create new prefunded long term care products.

In July 2011, the Commission on Funding of Care and Support published its report, Fairer Funding for All². The report made a number of recommendations but chief among these was a call for a life time cap on care costs. If this recommendation is adopted, such products would enable clients to insure the first £35,000 of care costs. (Ed: As stated elsewhere, the Government has been toying with doing something about Long Term Care funding since 1988 – developments are not expected !!!)

However, Defaqto research shows that only 17% of advisers think it is likely that the Commission’s proposals will be adopted, while many advisers thought it unlikely or were unsure.

Defaqto’s paper on Long Term Care, published today, highlights the findings of its adviser survey and outlines the key issues currently affecting the sector, including the possible impact of the Dilnot report.

Ben Heffer, Defaqto’s Insight Analyst for Life and Protection, said:

“If the Government adopts Dilnot or similar proposals, it stands to open up the product market and offer clear product sales opportunities for advisers. However, the lack of products is not the only problem within the long term care insurance market. Our research also showed that 61% of advisers do not advise their clients on long term care for a variety of reasons.

“The product market is poorly served with just a handful of plans to choose from but, if the long term care market is to flourish, greater commitment from the adviser community is also required. The purpose of the paper is to demonstrate the need for long term care insurance and to highlight the opportunities for advisers. The need exists now and advisers are uniquely placed to add value.”

Long Term Care

Before you read this, Long Term Care costs are much less of an issue for those who read our free booklet, Asset Protection Secrets.  Early planning not only improves your chances of better care, it dramatically improves the chances of your family inheriting at all.

• Annual cost of long term care in the UK is expected to rise from £26,000 currently a year to £33,000 per person by 2025.
• Longer life expectancy means a 37% increase in the number of people needing long term care in UK by 2025.  More pressure on resources.
• Almost one in five (17%) Brits are expecting to fund long term care costs for an elderly relative.

• 11.5 million Brits (23%) would use their property to cover the cost of their own long term care, probably leaving nothing for children and grandchildren.
• 88% of Brits believe the Government needs to set a cap on how much people pay towards long term care costs.  They have been talking about doing that since 1988!
• On average, Brits think the long term care funding cap should be set at £14,000. (No chance!)

Long Term Care Costs Report

The Future of Long Term Care report, launched today by retirement specialist LV=, shows as life expectancy in the UK increases, the number of people that will need to make use of formal long term care services will grow from 840,184 today to 1.1 million by 2025, an increase of 37%.

In line with a rise in the number of Brits needing long term care, LV= predicts the average cost of long term care per person will rise by £7000 to £33,000 in real terms per year by 2025⁽¹⁾, an increase of 27%. This puts the total cost of long term care for the elderly in the UK at £37.9 billion a year by 2025, compared to £21.8 billion now ⁽²⁾. Cost increases would be even higher if the effects of inflation were taken into account. 

What type of long term care are people in?

The Future of Long Term Care costs report shows that 52% (438,336) of those in formal care in the UK receive it in their home (domiciliary care), while 48% (401,848) are cared for in a residential home. The split of those receiving residential and care at home is expected to remain consistent in the future.

For residential services in nursing and care homes, currently those with assets worth over £23,250 are not eligible for Government support^[3]. LV=’s new report shows the average wealth, including assets such as investments, savings, property after mortgage, of those over age 55 in the UK is just £32,500 indicating that under the current rules many would have to fund the entire cost of care themselves with no help from the state.

How will we fund long term care costs?

Whilst nearly a quarter of UK adults (24%) expect an elderly relative to need long term care in the future, one in four of these (7% of all adults) plan to look after their loved ones themselves to avoid paying for care. Worryingly almost half (46%) of those expecting to fund care for others have not thought about how they will pay for it. Those that have say their savings (22%) and salary (19%) will be the main source of funding.

Nearly one in five (17%) UK adults believe they will have to fund the cost of their own long term care in the future. When asked how they would fund their own care if needed, nearly a quarter (23%) said they would use their property to pay for care, either through equity release, re-mortgaging or selling their home. 18% said they would use savings, and 16% would use their pension income.

One in seven (14%) said they would rely on the state to cover their care costs, and a worried 12% do not think they or their family would be able to afford any care and do not know how they will pay for it.

Why are long term care costs on the rise?

The biggest reasons behind the rising cost of long term care in the future are; women working later in life when they traditionally would have provided care; families increasingly living further apart lessening the option of care within the family; and most significantly, the rapidly increasing elderly population in the UK putting pressure on the infrastructure of care services and driving up cost^[5].

Vanessa Owen, LV= Head of Equity Release said: ”The UK is facing an uncertain future on the funding of long term care. Low interest rates and living costs continually on the up, coupled with social care budgets being cut, creates a worrying financial backdrop for many, especially those in retirement. It is a real concern for people who have the burden of long term care costs approaching, as currently they could be faced with an open ended bill which makes it difficult to plan effectively to meet these costs. With our report highlighting that the cost of care looks set to increase by 27% in real terms by 2025, people need to make sure they have thought about the possibility of paying for care, either for themselves or loved ones, and how it would be funded.

Government funding of Long Term Care Costs

The recent report from Andrew Dilnot, reviewing the funding system for long term care in England, suggests that a cap on the amount people pay towards the cost of their care be set at around £35,000, and recommends only those with assets worth over £100,000 should pay for the full cost of their care. The report from LV= reveals 88% of Brits agree there should be a cap introduced on the funding of long term care, and 22% of this group think it should be dependent on people’s wealth and not set at the same level for everyone. On average, people thought the cap should be set at £14,000, much lower than the cap recommended in the Dilnot report.

Almost a third (31%) believe the Government should fund the total cost of people’s long term care. The Government is due to formally respond to the Dilnot report in the coming weeks.

Vanessa Owen continued: ”The average wealth of those over 55 is above the current limit for state funding of £23,250 meaning the cost of long term care will need to be paid for out of their own pockets under the current rules. With the average cost per person of long term care set to hit £33,000 per year by 2025, it won’t be long before personal funds run dry. The Government needs to address the Dilnot report, and introduce some sort of cap to ensure that people can properly plan for the possibility of paying for care, and that people’s total wealth isn’t quickly eroded.

“A large proportion of people believe using their property will be the only option they have to fund long term care. If people are in receiving care at home they can release the equity tied up in their property to cover the costs and remain living there, and those entering residential care can sell or rent their home. Equity release meets a clear need to help cover the cost of care in the home, and could be better utilised for care funding in our view. If people are considering using their property as part of their or a loved ones long term care funding then it is important to speak to a specialist financial adviser.” 

The LV= Future of Long Term Care report was produced by the Desk research team at Opinium Research using 2011 predictions of volume and cost for long term care by the Personal Social Services Research Unit, PSSRU, additional material from the London School of Economics and the OECD as well as survey findings from Opinium’s online omnibus from 16th – 18th April 2012 on behalf of LV= (total sample size was 2,015 UK adults aged over 18)

(1)The average cost for long term care is currently estimated at £26,000 per year; however the Future of Long Term Care report predicted this will increase by 2.3% by the year 2015.  Thereafter with a projection of a cost increase of more than 10% per year, the price of a year’s long term care per person could rise to more than £33,000 by the year 2025. This does not include the effects of inflation that would increase this figure further.

(2) 1,149,112 (expected to be in long term care in the UK by 2025) x £33,000 (expected cost per year by 2025) =37,920,696,000 (or Vs 2012: 840,184 x £26,000 = 21, 844,780,704

(3) Excluding Scotland

(4) 2010 Laing & Buisson

(5) The rising costs predicted in this report do not include the effects of inflation which would increase the predicted figures for the cost of future care further. Instead all projections are based on 2010 constant prices as calculated by the PSSRU.

Long Term Care Costs

Once you have read this, go here for more CRAG information.
1. Summary
This circular:

I. Sets out the revised Personal Expenses Allowance (PEA) of £23.50, which comes into force on 9th April 2012.

II. Reminds councils that the capital limits will remain at their current level (i.e. lower capital limit £14,250 and upper capital limit £23,250).

III. Announces that the savings credit disregards will remain at their current level (i.e. up to £5.75 per week for individual supported residents in receipt of savings credit and up to £8.60 per week for couples).

IV. Reminds councils of changes to ex-gratia payments made to people who have received contaminated blood and how these should be treated in the financial assessment for residential charging.

The Annex to this circular contains fuller details.

V. Revised regulations and a revised Charging for Residential Accommodation Guide (CRAG) will be issued in time for these changes to be implemented in April 2012.

2. Action
This circular is issued under section 7(1) of the Local Authority Social
Services Act 1970.

3. Enquiries
Enquiries about this circular should be made by email to:
SCP-SERVICESANDCHARGING@DH.GSI.GOV.UK

Further copies of this Circular may be obtained from Department of Health, PO Box 777, London SE1 6XH, Tel. 0870 155 5455 or Fax 01623 724 524. Please quote the code and serial number LAC(DH)(2012)1.
Current circulars are now listed on the Department of Health website on the Internet at:
www.dh.gov.uk/letters. Full text of recent circulars is also accessible at this site.
© Crown copyright 2012. This Circular may be freely reproduced by all to whom it is addressed.

ANNEX TO THE CIRCULAR
I. PERSONAL EXPENSES ALLOWANCE (PEA)

Legal basis
1. The PEA is the weekly amount that councils must, in the absence of special circumstances, assume residents need for their personal expenses. The PEA is specified in regulations made under section 22(4) of the National Assistance Act 1948 (“the 1948 Act”). This amount is uprated each April, usually in line with the increase in average earnings.

2. The PEA applies in relation to all persons whose accommodation is arranged by a council under Part 3 of the 1948 Act, including residents of care homes with nursing on the premises, residents of council run homes and homes run by the private and voluntary sector.

New PEA amount from 9th April 2012

3. The Regulations will be amended to provide for PEA to increase from £22.60 to £23.50. Paragraph 5.002 of CRAG will be amended accordingly.

4. This is larger than the usual formula increase (90p per week rather than 65p per week). This is because DWP is making a number of significant increases to benefits from April 2012. For example, basic state pension will increase by 5.2%.These changes should result in a gain for councils in income from charging.

5. The intention of the above formula increase in PEA is to enable residents to keep some of the increase they are receiving in benefits, for their personal use. The increase to PEA has been set at a level that is expected to keep broadly constant the proportion of care home costs met from charges on residents.

The purpose of the PEA

6. The PEA is intended to allow residents to have monies for personal use. Councils, providers of accommodation and residents are again reminded that the PEA should not need to be spent on aspects of board, lodging and care that have been contracted for by the council and/or assessed as necessary to meet individuals’ needs by the council or the NHS. Councils should therefore ensure that an individual resident’s need for continence supplies or chiropody is fully reflected in their care plan. Neither councils nor providers have the authority to require residents to spend their PEA in particular ways and, as such, should not do so. Pressure of any kind to the contrary is extremely poor practice. See LAC(2002)11 for fuller guidance.

II. CAPITAL LIMITS
Residential care charges

7. As set out in LAC(DH)(2011)1, in the context of the Spending Review 2010, the capital limits will continue to remain at their current level, £14,250 for the lower capital limit and £23,250 for the upper capital limit.

8. The intention is to help protect the level and quality of social care services by enabling councils to raise additional revenue to pay for these services, from residential care charges. This extra revenue should help ensure councils can maintain the existing quality and quantity of social care.

9. The Spending Review 2010 covers Government spending up to April 2015. However, the Department intends to consider the level of the capital limits in the context of the next local government finance settlement in the autumn of 2012.

CRAG Home care charges

10. With respect to charging for home care, savings and capital should be treated no less generously than under the rules for assessing residential care charges. Councils should note that the capital limits set out in this circular will apply automatically as minimum requirements for home care charges.

III. SAVINGS CREDIT DISREGARD

11. LAC 2003(22) mentioned the introduction of a new savings credit disregard from October 2003, in response to the introduction of Pension Credit.

12. From April 2012, DWP will increase the state pension by 5.2% in line with the usual formula (the so-called ‘triple lock’) and increased the pension credit standard minimum guarantee (SMG) by 3.9%, which is over 1% more than suggested by the usual formula which for the SMG is average earnings. To fund the higher than usual increase in the SMG DWP has reduced the maximum level of savings credit that can be received.

13. However, as mentioned above (paragraph 4), DWP is making a number changes which should result in a gain for councils in income from charging. Therefore, Ministers have decided to make no change to the savings disregards. These will remain unchanged at up to £5.75 a week for individual supported residents aged 65 and over, and up to £8.60 a week for couples.

IV. CHANGES TO EX-GRATIA PAYMENTS MADE TO PEOPLE WHO HAVE RECEIVED CONTAMINATED BLOOD AND HOW THESE SHOULD BE TREATED IN THE FINANCIAL ASSESSMENT FOR RESIDENTIAL CHARGING.

14. Under paragraph 15 of Schedule 4 of the National Assistance (Assessment of Resources) Regulations 1992 (the “Assessment of Resources Regulations”) the following are disregarded in the financial assessment for charging for accommodation arranged under Section 21 of the National Assistance Act 1948. Any payments made by or derived from the Macfarlane Trusts, the Fund, the Eileen Trust, the MFET Limited, the Independent Living Fund, the Skipton Fund and the London Bombings Relief Charitable Fund. These disregards are incorporated in the Assessment of Resources Regulations through the Income Support (General) Regulations 1987.

15. On 10th January 2011, Ministers announced plans for new measures for people who contracted hepatitis C and HIV from contaminated blood. Details can be found on the DH website at www.dh.gov.uk/en/Aboutus/Features/DH_123381. These measures, including the creation of the Caxton Foundation, came into force on 31st October 2011. Councils should ensure their charging practices reflect these changes.
16. Paragraphs 6.030 and 8.042 of CRAG have been amended accordingly.

For more details and to download the full CRAG charging guide.

CRAG Regulations 2012/3

NHS Continuing Care has been a joke for years. Many families will have discovered that the idea of cradle to grave care in the NHS doesn’t apply if you are old and need long term care.  It does in theory if you have medical needs, but in practice the NHS will do everything they can to wriggle out of paying.

The effect of this is that people are forced to sell their homes to pay their care fees (which is why we wrote Asset Protection Secrets – but most people leave it far too late).  And in quite a high number of cases, the NHS should be paying for the continuing care – they have just wrongly refused too.  Simply because ordinary people don’t know how to fight the NHS in its own terms.

NHS Continuing Care – the BIG Rip Off – and there is a Deadline..

This is an extract from a recent poorly publicised NHS Continuing Care circular:

“We are asking individuals or their representatives to notify the relevant Primary Care Trust (PCT) in respect of previously un-assessed periods of time where there is evidence that the individual should have been assessed for eligibility for NHS Continuing Healthcare (NHS CHC) funding with respect to that care. The time periods and deadlines for notification are set out below

1st April 2004 – 30th September 2007 Deadline for claims: 30th September 2012.

1st October 2007 – 31st March 2011  Deadline for claims: 30th September 2012.

1st April 2011 – 31st March 2012 Deadline for claims 31st March 2013.

2. Why are these deadlines being introduced?”

That’s obvious – its to save the NHS money at the expense of old peoples homes being stolen.

My recommendation?  Stick in a claim to you local Primary Care Trust now if you have the slightest doubt.  Once the deadline has passed, I suspect only the European Court of Human Rights will be able to help you!

But before you do that, do your best to avoid NHS Continuing Care problems, get a copy of Asset Protection Secrets before the next generations goes the same way!

Here is an NHS Continuing Care Assessment sheet you may find useful.

The Society of Trust and Estate Practitioners (STEP) is calling on the UK government to clarify the legal and practical uncertainties around care home funding in order to put an end to the postcode lottery created by the current system.

STEP Worldwide Chairman, Michael Young, today addressed the STEP England and Wales Regulatory Group where he outlined the problems with the current system of care home funding and the resulting uncertainty faced by families and those that advise them.

Mr Young said: “The situation that has now been created around funding the costs of long term care creates an impossible position for everyone – local authorities, the public and advisers alike.

We have a current legislative framework which few support, not least because it creates a postcode lottery based on the attitudes of local authorities. Surely it should not be possible for local authorities to pick and choose what legislation they will enforce and what they will ignore,” said Mr Young.

His speech also warned advisers to proceed very carefully in discussions with clients who request help in avoiding care home fees and to clearly articulate the potential pitfalls of any such scheme.

In addition to publishing advice to its members warning of the dangers around products designed to avoid paying care home fees, STEP will be urgently writing to Ministers and Opposition spokespeople highlighting the difficulties being faced by those wanting to make plans for their later years.

Stephen Pett, MD of APWW commented “The current system is indeed unfair, with families where the parents pass on without the need for long term care being charged very low rates of tax.  Those families whose parents need long term care are often taxed at a rate of virtually 100%, so nothing is left for future generations without simple precautions being out in place.   Such precautions need early implementation, and they have some disadvantages which must be made clear.  We urge you to at least review our free leaflet on asset protection.”

Care home funding lottery.