Over the past few years, we have become all too familiar with the effects of an ageing UK population on pensions funding and the gap in state benefits. However, there is another serious issue at stake and it is one that, all too often, is not considered until it becomes an acute problem – the older we grow, the more healthcare we are likely to need. Furthermore at the same time as the state is becoming increasingly concerned about demands on its funds, the cost of long-term care is rising.
Many people are therefore looking for ways to help prepare for such an eventuality, either through a pre-funded insurance policy or, if the situation has already arisen, through an immediate care plan. ‘Immediate needs annuities’ can help to bridge the gap between your income and the cost of your care and are designed to help cover the cost of care if you need it immediately They pay a guaranteed level of income for as long as you live, in exchange for the payment of a one-off lump sum. Pre-funded care plans are no longer available to purchase, although you might have a pre-existing policy that allowed you to insure your future care requirements before they arose. Another possibility would be to consider using your pension pot to buy an enhanced annuity if you have a medical condition, a long-term illness or a lifestyle that could affect your health.
If your income is sufficient or if you have significant savings, you might be able to make any necessary payments for care from your existing resources – in fact, this could well be the most appropriate strategy in the case of short-term requirements.
Above all, however, it is important to plan ahead. Could you – or a family member – need long-term care, either now, or in future? Do you have the money to pay for long-term care? What type of care might be required? What will happen if your care costs increase more quickly than your income? If you are using your savings, how long will they last? Could your savings be depleted before your needs cease? What if you live much longer than expected? These are common concerns for anyone facing an immediate need for care. Chilvester can help you through the maze. Please contact us for an initial meeting.