We cannot know if we will require long term care at any point in our life, however, what we can do is be prepared for it, if it ever does come to it. It is important to understand your options when it comes to long term care, from the types of care available to ways of funding care, as this can reduce the need of having to make these choices in haste and under stress.
Paying for long term care is an important matter and one that needs careful consideration. There are many ways to pay for care, and while the state does provide means-tested benefits for care in tandem with the NHS, self funding care in part or full is common. Your financial assets can be used in different ways to pay for care.
One of the common ways for homeowners to pay for long term care is by releasing equity built into their home.
How does equity release pay for care?
Equity release schemes allow you to take some of the value tied up on a property usable by turning it into tax free cash. This can be taken in a lump sum or in regular/ad-hoc payments and can be used to pay for long term care, as long as the care is provided in your own home. The equity release plan can remain valid as long as the applicant continues to live in their home and ends if the owner dies or moves into a care home.
By releasing equity from a property in advance it is devalued as you have reduced the level of equity therein. Possibly, the equity release debt that has to be repaid once the house is sold cancels out any remaining equity on the home. However, gauging the initial equity release lump sum taken can protect this aspect.
Whether it is the equity from your home, or savings and investments in any other form, using your financial assets to pay for long term care has an impact on any inheritance you may want to leave for your family. A financial advisor or solicitor with expertise in long term care funding can give you sound advice on this matter.
Planning for care in advance is very important, as decisions related to long term care often impact not just on the individual but the rest of the family as well. It is necessary to understand all aspects of long term care and funding options, and in consultation with the family, make a plan while you are able and fit rather than in haste.