Stephen Wilkinson Stamford Bridge 200905

Care Fees Planning UpdateCare Fees Planning Update

Stamford Bridge Beaumont

Stephen Wilkinson Certified & Chartered Financial

Planner

AgendaAgenda

• Factsheet• Some Facts or Myths• Objectives• Care Fees Planning• Symponia Limited• Help in the current economic climate• Rules for Deputies• How care fees planning can help your

clients• Questions & Discussion• Next steps…

FACTSHEETFACTSHEET

• 497,000 elderly people in care homes

• Approximately 94,500 new elderly residents each year

• Around 61% fund their care privately• Average cost of a care home with

nursing is £588 per week

Source: Laing & Buisson 2006

FACTS or MYTHSFACTS or MYTHS

• 70,000 homes sold each year to fund care*

• Long term care insurance is expensive• You cannot insure yourself after the event• We’ll look after you at home if you ever

need care• I’ve saved all of my life – Social Services

will pay if I need to go into a home• Taking the family home out of the

equation means I’ll get free care

* Liberal Democrats 2006

ObjectivesObjectives

• To learn more about Stephen Wilkinson and his Care Fees Planning specialism

• To discover who Symponia Limited is• To learn more about the current long

term care market• To discuss ways that you can extend

the services you offer to your clients…

The elderly today are navigating a difficult journey

Advisers have a duty of care

Falling asset values and low Falling asset values and low incomes make care funding incomes make care funding

difficultdifficult

Financial goals can be within Financial goals can be within reach with a carefully reach with a carefully

prepared planprepared plan

A professional financial A professional financial planner will advise and planner will advise and guide you through the guide you through the

planning processplanning process

Cash flow modeling is the Cash flow modeling is the basis of financial planningbasis of financial planning

Orderly spending of Orderly spending of wealthwealth

In depth knowledge of In depth knowledge of products and their products and their

applicationapplication

Working knowledge of Working knowledge of trusts and taxationtrusts and taxation

What should you look for What should you look for in a caring professional in a caring professional

adviser?adviser?

Will a financial planner be Will a financial planner be able to provide the desired able to provide the desired

results?results?

Falling asset values and Falling asset values and low incomes make care low incomes make care

funding difficultfunding difficult

SymponiaSymponia• Symponia – the Greek word for Compassion• Established in 2004• An affinity group for experts; not a lone company • Unique philosophy:

– To really care about our clients & strategic partners

• 83 members who meet the following:– 78 member companies– Truly independent (following depolarisation in 2005)– FSA recognised qualification – e.g. CF8– Our own Assessment Examination– Customer Charter & Code of Practice & Conduct– Fully CRB checked

• Care Advocacy and Planning Service

Nursing & Personal Care Allowances & Contributions

England (RNCC)

Nursing Care = £106.30 pw Nursing Care = £146.30* pw

Scotland

Personal Care = £153 pw** Nursing Care = £69 pw

Wales

Nursing Care = £119.66 pw

Northern Ireland Nursing Care = £100 pw

Asset Mean Test Thresholds for Residential Care

England

Upper = £23,000 Lower = £14,000

Scotland Upper = £22,500 Lower = £13,750

Wales

Upper = £22,000 Lower = £20,750

Northern Ireland Upper = £23,000 Lower = £14,000

Personal Expense Allowance

England £21.90 pw

Scotland £21.90 pw

Wales

£22.00 pw

Northern Ireland £21.90 pw

Attendance Allowance

Higher Rate = £70.35 pw Lower Rate = £47.10 pw

Disability Living Allowance

Higher Rate = £70.35 pw Middle Rate = £47.10 pw Lower Rate = £18.65 pw

Disability Allowance Mobility Component

Higher Rate = £49.10 pw Lower Rate = £18.65 pw

Inheritance Tax Threshold*** (nil rate band)

Individual = £325,000

Married/ Civil Couple = £650,000

State Retirement Pension

Single Person = £95.25 pw Spouses Contribution = £57.05 pw

Married Couple = £152.30 pw

Pension Credit

Single Person = £130 pw Married Couple = £198.45 pw

NOTES

* For people who were in receipt of the “higher” rate before October 2007—may change after re-assessment

** The eligibility to Attendance allowance is lost when personal care is paid

*** The Married Couples’ Allowance will only be £650,000 if the surviving Spouse/ Civil Partner is claiming the unused proportion

of a deceased Spouse/ Civil Partner’s nil rate band

Carer’s Allowance

£53.10 pw

DWP & DoH 2009/10 FiguresDWP & DoH 2009/10 Figures

Symponia - mediaSymponia - media

• In the press– Times/Sunday Times– Financial Times – Financial Q&A– Telegraph/Sunday Telegraph– Mail on Sunday– The Lady

• On the radio– Moneybox live…

The ‘LTC’ MarketThe ‘LTC’ Market

Pre-funded• All-but dead!• Most providers left

2003/4• 10 year reviews• 1 current player

– 5 year reviews– No guaranteed

premiums

• New interest

Immediate-Needs (ICP)

• Thriving• Stability amongst

providers• Growing 29%+ pa• New interest• Can protect inheritance• Provides peace of mind• Protects choice…

Care Fees PlanningCare Fees PlanningMay Include:

• Pure advice– The best advice may be to do nothing!

• ICPs– Should always be considered

• Investments– To fund care– To build inheritance

• Equity Release– To fund care– Government Loan Scheme

• Knowledge of IHT planning• Professional Fees• Legal knowledge…

Help in the currentHelp in the currenteconomic climateeconomic climate

• Many care plans are paid for from the proceeds of the sale of the family home

• Homes may not sell for many months– Do remind clients about the 12-week

disregard– Don’t forget the Government Loan

Scheme (deferred payment option)– Managed Sale options

• (Bridgefast/Eldercare Solutions)

Its not all aboutIts not all aboutCare HomesCare Homes

• Symponia is working with the market leader in “live-in” care on an exclusive basis

• Individuals with live-in carers tend to spend 5 to 6 years living at home before going into care– This means that our members are working for

much longer with them and their family• It is perceived that the cost of live-in care is

much more expensive than care in a home– In fact, the costs are almost identical

• Around 60% of people in residential homes could have easily afforded live-in care as an alternative

Rules for DeputiesRules for Deputies

• Came in as part of Mental Capacity Act 2005– Came into force 1st October 2007

• Previous to this date:– Court of Protection could appoint a Receiver

• Any funds dealt with by the Court

• Now:– Application to the CoP to appoint a Deputy

• Deputy can invest funds in the best interests of the person lacking capacity

• Deputy’s should be advised to seek professional advice on the best investments

Liable Relative’s RuleLiable Relative’s Rules42 National Assistance Act 1948s42 National Assistance Act 1948

• s42 made spouses liable to maintain one another

• Civil Partnership Act took civil partners outside of s42 provisions

• Many local authorities still on “fishing exercises” and continuing to ask spouses/partners information about each other

How can we enhanceHow can we enhanceyour business?your business?

Legal Services Act 2007

“Every lawyer who does not have a close link to a specialist financial adviser, is setting themselves for failure”

Jon Wilkey 2009

How can we enhanceHow can we enhanceyour business?your business?

• Private Client – referrals• Grow your client base/reputation

– Introductions to care facilities– Speak at client seminars– Share access to respective clients– Receive regular financial updates

• Expand the portfolio of services you can offer your clients…

Questions & DiscussionQuestions & Discussion

Contact DetailsContact Details

Symponia Limited2 Owlets End

BartonBidford-on-Avon

WarwickshireB50 4ND

01789 774 595

Charles WilkinsonFinancial Planning

Ltd118 Fishergate

YorkNorth Yorkshire

YO10 4BB

01904 631 839