Less than 1% of the people in care homes are protecting their financial position with an insurance plan.

Each year in Britain, around 70,000 homes are sold to fund long-term care. The sad thing is that most care home residents simply eat away at the money until it runs out, and they leave to chance whether they will expire before the money finally does. With more pressure on government and local authority budgets and nursing home fees averaging £24,000 a year across the country, and exceeding £31,000 a year in London, the money is often not going to last long enough.

Britain has an ageing population. Within 20 years more people will be of state retirement age than working.

People wrongly think that the government will take care of them if they find themselves needing to go to a nursing home. However, the government will only pay care bills like this where the person needing to go to a nursing home has less than £12,250 (including the value of their home). Any benefit is eroded over these amounts, disappearing altogether if someone has £20,000 (including the value of their home). Having said that, if a patient’s care is primarily health related, the heath authority becomes responsible o that should be free. However, it is not that straightforward. In February last year, the health ombudsman said all the criteria used by the 28 strategic heath authorities in assessing these cases should be reviewed, and all cases back to 1996 needed to be checked to see whether the criteria had been correctly applied. The review should have been completed by 31 March, but is still far from finished.

All of these factors highlight the need for careful planning when it comes to long term care. It is something that should be thought of by people of all age groups and at all stages in life.

Single people often feel they will not need long term care planning, but often it is them who may need it most. If they don’t have the money for nursing home fees, there is often no one they can turn to for financial help, and burdening parents with these kinds of costs is often not acceptable to them.

Over the last 30 years the life expectancy for men has gone up by 9 years, and the life expectancy for women has gone up by 6 years. In the year 2020, the average life expectancy for both men and women is likely to be the same.

A person retiring at age 60 may expect to live some 28 year post retirement.

If you need long term care after tax costs of £31,000 per annum, the value of your estate would reduce quite substantially. If care was required for say 25 years, than this, after tax, could amount to £1,000,00 with inflation!

Inheritance tax affects your beneficiaries, but long term care affects your quality of life.