Recent medical advancements have resulted in a growing elderly population, which has placed increasing pressure on public resources. With councils unable to contribute to the cost of care for the elderly at the same level as in previous years, the burden has fallen on individuals to pay for care from their own resources. This has made it increasingly important for the cost of care in later life to be taken into consideration when planning for retirement and estate planning for the next generation.
A recent Labour study has indicated that in the last two years there has been an 11% drop in the number of elderly people receiving council-funded care. With council budgets being reduced and more people living longer, the strain on council-funded care will almost certainly increase, resulting in growing numbers of the elderly population failing to benefit from funded care. Councils have been forced to tighten their eligibility criteria, with only those with the most critical needs qualifying for care in the first place.
Figures show that the average cost of home care currently stands at £13.61 per hour. With fewer councils capping the amount an individual has to contribute to their care, the cost of care in later life has become an increasing burden as only people with assets below £14,250 get all of their care paid for. A recent study by Marie Curie showed that while the vast majority of people expressed a wish to die at home, in 2010 only 39.3% of those people who died did so. If this is what an individual wants then it is necessary to make provision and plan, so that the costs of being cared for at home can be met in later life.
George Osborne's so called "granny tax" has also affected financial planning for the elderly population. This affects an individual's tax free personal allowance, with around 4.41 million people being worse off as a consequence of the changes. Those due to turn 65 after 5 April 2013 will miss out on around £285 of tax free income for the 2013-14 year compared with what they had expected.
With the mounting costs of care in mind, people must take steps to plan to ensure that they have adequate resources in place to meet these financial demands in later life. We can provide advice on planning to meet these costs. We can also advise on estate and inheritance tax planning for your family's future.
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