Funding annual care costs
Back in the early 1990s the challenge of paying for long-term care for the elderly seemed rather higher on the personal finance agenda than it is now.
Demand at that time was driven by anxieties about new rules introduced under the Health and Community Care Act, which came into force in 1993. The act forced people with savings or other assets of a certain value to pay for their own long-term care costs.
Today a more common tactic for families is to make plans once immediate care is required for an elderly relative.
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This can be done using a specialist annuity called an “immediate care plan” that pays out a fixed sum to cover annual care costs, or families may choose simply to drip-feed payments from their savings, or from the proceeds of the sale of the family home. Each immediate care annuity is individually underwritten to take account of age, sex, health and other factors. The payouts from immediate care annuity plans, are tax-free as long as they are paid to the registered care home owner.
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