Amy´s Story : Investing for Care
Amy had started to suffer from dementia in 2002 and by the end of 2003 it became clear that she was going to need to move to a specialist care home. Her son-in-law, Simon acted as her power of attorney and contacted us to discuss the financial options surrounding how her stay in a care home could be funded.
When we spoke with Simon it was clear that Amy was not claiming any state benefits. We helped him to arrange Higher Rate Attendance Allowance which at that time provided her with a further £58 a week. We also explained that because Amy’s assets excluding her home were less than £20,000 (now £23,250) she would be entitled to local authority funding of her care for the first twelve weeks. This benefit is designed to allow time for the property to be sold.
Amy lived in the Midlands and had a property valued at £115,000 and £9,500 in savings. Her care fees were £1,400 a month and she had income of £610 including Attendance Allowance. After allowing for £80 a month in spending money Amy had a shortfall to cover of £870 a month. The shortfall had risen to £1,140 by April 2010.
We discussed all of the various options for funding Amy’s care including the purchase of an immediate or deferred care plan. Simon decided that he would prefer to invest £100,000 of Amy’s money in a portfolio of cautious investments specially selected for someone in care, with the balance being held on deposit.
Sadly Amy died in October 2010 but over the previous six years these deposits and investments met the shortfall between her income and care fees. Simon’s good planning meant that not only did Amy spend her final days in her chosen home but she was also able to leave around £80,000 to her family.
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Important Note
Past performance cannot be seen as a guide to the future. The value of investments can fall as well as rise and you may get back less than was invested, particularly on withdrawal in the early years.
Our case studies have been written to illustrate various aspects of care fees planning. Although they are based on real clients that advisers at carefeesadvice.com have dealt with in the past, the names and some of the details have been changed.
The benefit rates in this example relate to the financial year 2004/2005 when this client was advised. For current state benefit rates see the State Provision page of this site.
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