At least eight people a day have a legal charge placed on their property to recoup care costs, according to data obtained under the Freedom of Information Act by NFU Mutual.
Research conducted by ICM on behalf of NFU among 2,000 UK adults last month, found that old age care costs were cited by 51 per cent of respondents as a factor they fear could impact future wealth.
Since 2009 local authorities have placed legal charges on more than 15,000 properties, which equates to around eight a day. Since that time, council income from care home residents in England has increased by 18 per cent.
|8 Properties Per Day go to Pay Care Costs|
In some areas people may be forced to sell their house to pay for care, although many councils operate a deferred payment scheme that allows people to keep their home during their lifetime.
From April 2016, some elements of care charges will be capped, potentially reducing overall costs, and all local authorities will also have to offer deferred payment schemes so no-one should be forced to sell their home, but annual interest of around 4 per cent will apply.
My Willbroker Blog Smoke and Mirrors the true cost of care explores what the new care cost rules will truly mean, and the potential hidden increases in fees.
Any money spent on care fees prior to this date will fall outside the cap, as will the cost of accommodation and food, hotels and any amount spent above the local authority’s ceiling.
In addition, from 2016, local authorities will be obliged to offer access to advice from a regulated independent adviser.
Furthermore, research from the Institute and Faculty of Actuaries claimed just 8 per cent of men and 15 per cent of women will benefit from the £72,000 limit on what people have to pay towards their care.
Sean McCann, chartered financial planner at NFU Mutual, said: “None of us can know whether we’ll need care in later life or how much we’ll have to pay. Even the best financial plan won’t allow you to avoid some costs, but it can help increase how much you leave to your family.
“There is no one-size-fits-all approach, but there are steps that can be taken to protect your savings.
“There is some very straightforward planning that can help, especially around pensions and inheritance tax, although with the constant changes to the rules you need to keep your eye on the ball to make sure you don’t pay more tax than you have to.”
Other factors cited as a fear that could impact future wealth were changes to pensions and tax (41 per cent), reduced income from death of spouse or partner (31 per cent) and poor financial decisions or lack of planning (20 per cent)
In contrast to care home costs, only 11 per cent of people aged between 45 and 64 are as concerned that inheritance tax will affect their family’s wealth.
Planning for later life is under valued by most people but using the right strategies can potentially save you and your family tens of thousands of pounds.