Why care needs care
I would like to highlight an issue that is likely to affect us all, directly or indirectly. As more and more of us are living longer, how will we pay for the care of frail, elderly family members?
Many might never have never considered this, or think that the government will cover the cost. That is not usually the case. Anyone with assets or income over £23,250 has to fund themselves.
While billions of pounds are spent on the NHS, care is funded by local authorities, whose budgets are under unprecedented pressure. They have cut care funding, resulting in regular recent scandals of care-home failures or neglect, and poor elderly care. We want better than this for ourselves or our loved ones.
Of course, the Jewish community's strong family traditions help ensure that older relatives are lovingly looked-after and marvellous care institutions are dedicated to looking after the most vulnerable members of our community. But care still needs to be paid for. If a loved one becomes incapacitated or needs care at home or in a residential institution, you and your family suddenly face huge costs (often well over £400 a week). You need urgent specialist financial advice as paying for care can be complex, so you should explore all the options.
Equity release - borrowing against the value of the family home - is one way of raising money for care costs. But don't rush into this. Some local authorities cover the first few weeks in a care home and offer so-called "deferred payment plans" under which they pay for your care and deduct the cost (interest free and without a fee) from your estate later.
The ideal is to set money aside to prepare for care
Another option is an "immediate needs annuity" whereby you pay a fixed lump sum to an insurance company that will cover the costs of care for however long you need it, giving peace of mind. The ideal, of course, is to set money aside to prepare for care. Perhaps £20,000- £30,000 (two or three years' ISA allowance) to ensure funds are there to cover at least the first year's care costs.
The government is planning to reform social care and I believe it should urgently encourage care savings plans. Recent official reviews have highlighted how to simplify and improve our system to help people understand and recognise the need to pay for care costs. The sooner we help people prepare, the sooner we can address the elderly care crisis.
Ros Altmann is the director general of Saga and a former government pensions adviser.