Power of Attorney and Planning for Care

When planning your finances, we all need to accept that there may be a time when we will need to have those decisions made for us by someone we trust. A power of attorney is a legal document that lets you appoint one or more people (attorneys) to help you make decisions or to make decisions on your behalf. This gives you more control over what happens to you if you are no longer able to make your own decisions.

You can use give your attorney the power to make decisions about:

• finances – paying your mortgage, selling your house, investing your savings or buying items you need
• health and care – what you should eat, or what type of medical treatment you should have.

Your home may be repossessed if you do not keep up repayments on your mortgage.

How you spend in retirement
In early retirement we typically spend as much as we do in during our working lives. This amount slowly decreases as we become older. However, care fees mean our spending rapidly increases at the end of our lives. As more of us are requiring care and for longer, this is more of a consideration than it has been in the past and impacts retirement planning in early retirement years.

The UK is facing a huge strain on its care services in the coming years – if they’re not already feeling it. The UK population is growing and causing the care sector to grow at rapid rates. Preparation is key for those wanting to receive quality care.

What will I have to pay for?
The NHS pays for all aspects of medical care, and this is free at the point of delivery. For those unsure about who pays, it’s important to know that there are three types of care; social, registered nursing, NHS continuing healthcare.

The means test will look at the individual’s regular income (pensions, benefits and earnings) and capital (savings, investments and property). For example, in England if you have more than £23,250 then your capital is deemed to create sufficient income – on top of your pension and other income – to cover all of your social care costs. The chart below shows the regional variations in the means test for 2017/18.

* The £78 benefit is only payable for those who require Nursing Care.
** The above rates are the DWP rates applicable 2017 /18, and have been taken from each of Age UK’s regional websites

Find out more about your options for later life by booking an appointment with an adviser

Other than in Wales where the upper and lower limit are the same. In England, Scotland and Northern Ireland, we have to take the lower capital threshold into account. In these areas, £1 per week per £250 over the lower threshold is added to other income to assess affordability. The reality is that even when you reach £23,250 the capital erodes pretty quickly down to that lower threshold. Once this reaches that lower threshold then the capital is no longer taken into account.

• • 1. Do you envisage a time when you won’t be able to make decisions about your finances or your care?
    2. Have you made any provisions for your care?
    3. Are you comfortable with the idea that your legacy may be used up to pay for you and your partner’s care?

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