Preparing for Old Age

Making sure you you are prepared

The Welfare State was set up with the misleading slogan that, (if you paid your taxes and National Insurance) you would be cared for "from cradle to grave". People worry about paying Inheritance Tax but consider this - the Inland Revenue take 40% tax on assets over £263,000 (2004/5). You are dead. And if you are taken into care, the Local Authority can take almost 100% of your assets. You are still alive !

The National Health Service may be good at dealing with "acute services" usually in hospital "free at the point of delivery". No longer do you stay in hospital for recuperation. As soon as your condition has stabilised, you are discharged. It is said that some decisions to discharge are made too early and are due to financial pressures, rather than on medical grounds.

Where do you go ?

Home - To be looked after by caring relatives, who are prepared to sacrifice their earning opportunities, privacy and social life.

Private Nursing Home - If you can afford the £200-1,000 per week, depending on location and amenities provided.

Local Authority - They can provide help in your home, at day centres or can buy-in beds from the private sector. The Local Authority provide a free assessment of your needs but target their resources where need is greatest.

If you need non-residential services, the Local Authority cannot charge more than it is reasonably practical to pay, but charging procedures varies from one Local Authority to another.

For non-residential services, there is a Means Test. If you have more than £16,000 capital (which can, in certain circumstances, include your home) you will pay the standard fee.

When your capital is reduced below £16,000, other considerations apply. These are too involved for this short note but it is not good news. A small personal weekly expenses allowance is given to meet the costs for clothing, haircuts, toiletries, treats and presents for relatives and friends!

The Local Authority can only assess the means of the person requiring care, not those of a spouse or partner.

Since 1948, spouses (not co-habitees) have always been liable to maintain each other. In the event of non- co-operation, the Local Authority can without formality and without your knowledge, put a charge on your home. It is not necessarily effective (or desirable) simply to give away assets and let time pass. The Local Authority will argue that you intentionally deprived yourself of assets and that the gift should be ignored.

Local Authorities, in this area of work, act in their own financial interests and are not out to advise you

You should take advice on the detailed rules as they apply to your present financial position and circumstances.

Whatever age you are, you should ideally plan for your old age. If you are over 50 and even in good health, you might appreciate a full "wealth check" to encompass

• Will
• IHT planning
• Enduring Powers of Attorney
• Funeral Planning
• Equalising Estates

as well as the issues raised in this page.

Often, consideration has to be given to former spouses, children by first marriages, adopted or illegitimate children, family disputes. It is not sufficient to deal with the above areas in isolation.

Related topics you may find useful:

Making a will
Powers of attorney - Ordinary, Enduring or Lasting
Wills

Call Michael Breeze on 07900 195 195 or call 0845 270 2511 to set up an appointment