So you are faced with the prospect of providing long term care either for yourself or for an elderly relative. The first issue to combat is where the care will be provided. I may be beneficial for you to remain in your own home or if this proves to be too costly you may need to reconsider a move into residential or nursing home. Once a decision has been reached about the location of the care the next question will usually relate to the cost of care, who will need to pay and is this method of payment sustainable for the lifetime of the individual.
It may be that when you assess your assets fall below the lower means test limit which is currently $14,250 and therefore will qualify for your care costs to be paid for you by your Local Authority. The other reason why your care costs will be covered would be if you qualified for continuing NHS health care. You may receive this benefit if you are assessed as having a primary need for medical care/nursing care. If you are considered to be a self-funder you will need to ensure that your assets are managed correctly in order to provide an income to cover the care costs for the rest of your life.
The most common way to achieve this is by purchasing a point of care annuity also known as which provides the income required.
In return for a lump sum payment, the insurance company will provide a guaranteed income for the rest of your life. You are able to include some level of escalation to your income in a bid to keep pace with the increase in the cost of your care. It doesn’t matter if the annuity is used to pay for care in your own home or in a residential care home, providing the income is paid directly to a registered care provider the payments will be paid free from income tax.
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