Written by Lisa Morgan, partner in the specialist Nursing Care team at Hugh James Solicitors
New figures released in M&G Wealth’s Retirement Revisited Report have revealed that 1 in 3 people (33%) are concerned about how they will fund their health care in retirement, despite being only 12 months away from retiring. 20% are not at all confident in their retirement plans, according to the report.
Within this, there is a serious imbalance between women and men, with under half of women (48%) feeling confident that their existing retirement plans will enable them comfort when they finish working. This compares to 66% of men.
Whilst these statistics are worrying, certainly, they are unsurprising. The cost-of-care crisis is no secret and has been made all the more apparent with the ongoing cost-of-living crisis. An ongoing landslide of difficulties, including a crisis of staffing in the care profession, particularly in the wake of Brexit and the global pandemic, and an ageing population, has meant that the difficulties within the care sector show no signs of reducing.
As the Government has yet again delayed the introduction of the social care cap – which would mean the maximum an individual would pay for social care in their lifetime would be £86,000 – concerns are building among those approaching retirement.
The Retirement Revisited Report suggested that 3% would move in with their children to help fund the cost of care. However, a larger proportion, 15%, said their plans involved the sale of their property.
Unfortunately, as financial advisors will be aware, sale of property is very common among patients and their families who need to pay for astronomical care costs. We have seen monthly nursing care costs reach £8000 per month, and the only option is to sell family homes or other large assets.
However, what many advisers and their clients are unaware of is the availability of financial support. The NHS must pay 100% of nursing care fees, should the patient’s needs fall under health, rather than social care, as part of the NHS’s Continuing Healthcare Package (CHC). Funding is entirely unrelated to an individual’s wealth.
One of the primary complexities of CHC is identifying the difference between health and social care and where an individual falls regarding this. It is vital that the individual is properly assessed by the official channels. A healthcare need is related to the treatment or control of an illness, disease, disability or injury, whereas social needs focus on the maintenance of day-to-day living.
For those approaching retirement and fearing the cost of care, this package could be a viable solution and eliminate the need to sell the family home or other. Unfortunately, it is often the case the individuals are wrongly assessed. 30% of those who should be eligible for fully funded nursing care are turned away. In some cases, patients and their families are not informed of the availability of CHC.
Continuing Healthcare is often referred to as ‘fully funded care’ and is a package of care arranged and funded solely by the NHS. It can be received both in a private care home or at the home of the individual. If the individual demonstrates primarily health needs (be they physical or mental), then the NHS must pay for their care in full, regardless of any personal wealth.
The full NHS funding is not based on a diagnosis of an illness, or the fact an individual is being well cared for. It is based on the type and amount of care someone requires to meet their needs.
As such, it is key that financial advisers who are dealing with clients with concerns around their financial futures, or their families, are aware of the existence of this funding. Selling the family home, whilst it may seem the only solution to a desperate situation, is most certainly not the only viable way to pay for care.
For financial advisers, the first step may well be to ascertain whether the patient has been correctly assessed under the NHS’s assessment process and whether they have been wrongly denied funding. This can also happen in retrospect; paid fees can be claimed back from the NHS should a challenge against the initial assessment be successful. Again, it is important to note that this is the case even if the patient has passed away, as fees can be reclaimed by next of kin.
Although challenging wrong assessments can be a time-consuming process, statistics from the Department of Health highlight that 22% of challenges are successful at Integrated Care Board (ICB) level, and a further 30% on a national level.
The figures revealed in M&G Wealth’s Retirement Revisited Report suggested that only 1 in 3 (35%) are very confident of their retirement plans, with the majority feeling apprehensive.
The impact of the cost-of-living crisis, as well as the difficulties facing the care sector, have no doubt impacted the security those approaching retirement felt towards their financial futures.
Nevertheless, there is support available. For those advising concerned clients, or their families, the NHS’s Continuing Healthcare Package should be at the forefront of options for funding care for those who are eligible.