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Paying for social care (older people)

Taking financial advice about paying for care

This page covers:
• Specialist later life financial advisers
• How financial advisers can help with paying for care
• Concerns about taking financial advice

Paying for care often means having to sort out how it’s best to do so. It might be through income, pensions, investments or savings. People sometimes find themselves with a large sum of money to invest especially if they have sold a house. Some of the people we spoke to had consulted financial advisers and found it helpful to have someone with specialist expertise and outside the family to look over the financial arrangements. When consulting a financial adviser it is important to check they are on the financial services register. 

 

Tish Hanifan, from the Society of Later Life Advisers, explains what to expect from a financial adviser.

Tish Hanifan, from the Society of Later Life Advisers, explains what to expect from a financial adviser.

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Hello, I’m Tish Hanifan. When you're making care funding decisions it's important to seek financial advice from an adviser who is a later life specialist. That can make all the difference. But what should you expect from that adviser? We asked that question when setting up the organisation of which I’m the founder and joint chair, The Society of Later Life Advisors, SOLLA.

A good adviser should obviously have good technical knowledge, but they should also have more than that, they should have empathy and understanding to work alongside you to achieve the right outcome. And be someone in whom you can have confidence that they want to get this right for you and they're not simply there just to earn money. That's what the accreditation demonstrates.

Someone such as a SOLLA accredited adviser not only meets the requirements of the financial watchdogs, but has achieved a voluntary later life advisor accreditation which is designed to test their wider knowledge of facts which will make a difference to your decision, such as the benefit system, how local authority funding works, and how and when the National Health Service might fund all or some of the care. And, along with that, it demonstrates someone who understands what you're maybe going through when making these choices, especially if you have the additional responsibility of making this on behalf of someone else, for example, with the power of attorney.

Later Life Financial Advice

The Society of Later Life Advisers accredit financial advisers who specialise in later life financial issues. Jane’s friend recommended a specialist later life financial adviser and, although Jane had not had financial dealings before, she felt confident talking to the adviser because her friend had been through the same process.

 

Jane contacted a financial adviser to look at options for paying for care.

Jane contacted a financial adviser to look at options for paying for care.

Age at interview: 60
Sex: Female
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Because; and the recommendation came from a friend of mine who had done the same for his mother and he put me in touch with this specialist advisor who I thought, who was great, as far as I was concerned. They were I never felt under any pressure, they just were able to, they took the facts in terms of the expenditure and the money and the, what was invested and what could be realised and just distilled it down into a really straight forward black and white unemotional assessment of, well it will cost you this and the capital will decrease at this rate if you do nothing and it will last X, you know, it was, some might find it quite brutal, I found it quite comforting really that somebody else had looked at the figures and had reflected back to me the sort of issues that I had been considering and discussing and the and I did discuss it with my mother at times when she was obviously able to have that conversation.

Not everyone who sought financial advice went to a specialist later life financial adviser. Some people we spoke to went to general financial advisers for advice about investments and tax as well as paying for care.

 

Simon found a financial adviser who really helped him when his parents began paying for care.

Simon found a financial adviser who really helped him when his parents began paying for care.

Age at interview: 60
Sex: Male
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I had to, in order to get control of her funds to pay for the care, because dad simply wasn’t capable of doing that, because he, we hadn’t got Power of Attorney for mum I had to go through Court of Protection; and it was a very steep learning curve because I knew nothing about anything until then. I remember there was, I rang for some financial advice and a guy came out from [Town] and he could see that I knew nothing and he gave me lots and lots of information of what to do and then he said, “I’m not going to charge you for this,” he said, “when you want to have financial advice then come and see me.” And I remembered that, I thought that that was a really, that was a very, very kind thing for him to do. As it happens, about six months ago I decided that we ought to get things sorted for, inheritance-wise for dad, because he’s, even though he’s ninety-seven he’s not going to go on forever. So I got this guy back again, I said, “Look, I remembered that you were so kind.” So I did employ him in the end on my dad’s side, but anyway. He gave me lots and lots of information and that’s when I started to learn how this process worked.

 

Sinclair has recently moved to a care home and wants financial advice after selling the house.

Sinclair has recently moved to a care home and wants financial advice after selling the house.

Age at interview: 92
Sex: Male
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And even now I’m about to turn to them for advice on, yet again only on now that we’re going to have to dip into capital, “which would be the best way?” for all sorts of reasons, best for taxation, best for further investment, and everything, yeah so in that respect, and they in fact even advised me on a solicitor to use; we’re very fortunate in that we’ve got a lady who’s very approachable has no trouble leaving her desk and coming here to talk business and go over things so and we’ve put them in touch with one another so that they can talk, you know, we’ve said, you can discuss our financial business with our solicitor etc. etc. yeah, yeah.

People said that it was good to have a professional look over the figures because when it comes to paying for care it is good to have a ‘black and white’ ‘unemotional’ assessment of the financial position. Rosemary and her husband, Graham, had used a trusted financial adviser for years and he had advised on their wills and provision for Graham’s children from a previous marriage.

 

Rosemary’s financial adviser is not a later life specialist but he suggested planning ahead for care fees.

Rosemary’s financial adviser is not a later life specialist but he suggested planning ahead for care fees.

Age at interview: 65
Sex: Female
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It was if one or other of you needed either part-time or eventually full-time care this is how you could move things around in order to cover what we project are the likely costs; and it was pretty realistic in terms of the cost estimates that she was using and so on. So that was reassuring, so I didn’t immediately go into blind panic mode when I knew that Graham needed to have more care than he could get at home.

 

Margaret visited a local financial adviser who gave a free initial consultation.

Margaret visited a local financial adviser who gave a free initial consultation.

Age at interview: 79
Sex: Female
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I’ve forgotten something. My daughter said she arranged a free one hour financial, with a financial adviser to, who suggest, wanted to know all my assets so that was very helpful because I was really, and I still am worried about how I am going to, because Joe is he’s not at all well but he’s, he is maintaining you know, he, they look after him [laughs] very well.

One of the options for paying for care that a later life adviser may suggest is a care funding plan known as an Immediate Needs Annuity. Annuities can be bought to pay towards someone’s care fees for life. Very few people seemed to know about these type of annuities. They are a kind of insurance policy that provides a regular income to help fund a person’s care fees for as long as they live. These annuities can only be bought at a point when care is needed and the person buying an annuity must have taken financial advice.

Equity release

Tish, from the Society of Later Life Advisers (SOLLA), told us how releasing money from the value of your home can affect the way care is funded.

 

Tish Hanifan, from SOLLA, explains that equity release can sometimes affect eligibility for funded care.

Tish Hanifan, from SOLLA, explains that equity release can sometimes affect eligibility for funded care.

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There's a wide range of equity release products available nowadays, with the providers of these plans offering many different options as well as different rates of interest and ways to repay them. And that's why it's best to take advice from a specialist later life financial adviser who regularly works with clients and advises them on equity release. They'll be able to help you find the right solution. SOLLA has a later life lending advice standard which will help you to identify advisers who will be able to navigate you through all these choices and decide if equity release is right for you. A good financial adviser will help you understand the costs involved and the pitfalls as well as the benefits. Most importantly, if you're receiving care in your own home the local authority means-testing currently disregards the value of that home. Many people take out equity release to raise some money from their home and they're not considering using it to fund their care. However, it's very important that you do take into account what may happen if you do need care. The money then will be assessed by the local authority when they're looking at your eligibility for support from them.

Concerns about financial advice

Not everyone we spoke to felt that financial advice was right for them. Some people felt that financial advisers were simply trying to make money or they worried about the risk involved in investments. Rosemary thought it was worth getting advice from a professional financial adviser while understanding that not everyone would want to. She suggested that people could also check money advice from other sources which do not charge for their services, such as, Citizen’s Advice, Martin Lewis Money Expert or the Money Advice Service.

 

Andrew thinks that financial markets are too risky to invest his mum’s money.

Andrew thinks that financial markets are too risky to invest his mum’s money.

Age at interview: 58
Sex: Male
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I mean interest rates are poor, so poor at the moment, you know, what’s the point? We don’t want to gamble with the money I mean obviously we could try something to give higher returns but, you know, I don’t think we can afford to gamble with the whole world’s financial systems [laughs] seemingly, well the whole world appearing to be crazy at the moment with lots of things. It’s very difficult to make that judgement so obviously we need some sort of security with that. You know, mum has a reasonable amount in her premium bonds and hopefully [laughs] one of those will come up trumps [laughs] but who knows? That’s the only things we do. I mean we have it in a standard account with a normal bank and she has some premium bonds and that’s it, yeah, and we can’t afford, I don’t believe, to be risky with anything else. I don’t think the sums that she has are enough to warrant us going to a bank and getting significantly better interest rates or anything like that.

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