ISSUE 14

Generation
H E L P I N G YOU U N D E R S TA N D L AT E R L I F E P L A N N I N G

L AT E R- LI FE CARE COV ER – A DIF F ERENT Welcome to Issue 14 of our

WAY O F PAYING FO R C ARE newsletter focusing on later
life planning. In this issue:
• Later-life care cover – a different
way of paying for care
We’re living longer, but not necessarily longer in good health. According to research
carried out by the Association of British Insurers (ABI) in 2015, one in three people • How loneliness in older people
will need some form of care before they die. As life expectancy increases, and more makes them more vulnerable
people live longer, a greater number of people will find themselves unable to live to scams
independently in their later years. • The cap on care
Care needs are very unpredictable: What is later-life care cover?
individuals and families don’t know When you take out later-life care a medical specialist as suffering from
what care costs they might face in the cover, you decide how much cover an illness, accident or infirmity which
future. A quarter of people will need to you want at the outset. This is called leaves you unable to perform three of
spend very little, but one in ten people ‘the sum assured’, and it is the amount six everyday activities:
will have serious care needs, and could that would be paid out on death or • Washing
face costs in excess of £100,000.1 The diagnosis of terminal illness. But if you
funding of long-term care is one of the can no longer live independently, the • Dressing
major challenges we face as a society, policy is designed to pay out an ‘early • Getting in and out of bed
and there will be different ways of claim’ lump sum of up to 75% of the • Moving around your home
approaching it. sum assured to help towards the cost of • Eating and drinking prepared meals
In this article, we look at one of the newer your care. and drinks
solutions available: this is designed to The maximum sum assured is £400,000, • Using the bathroom unaided
take the uncertainty out of how these which would provide a lump sum of
You will also be able to claim if you
costs would be met if necessary, while £300,000 if you needed to make a claim
experience a permanent reduction in
leaving a financial legacy for loved ones to help with care fees.You can claim on
mental capacity, as assessed by a medical
if care is not needed. the plan if you have been assessed by
specialist, meaning you need supervision
and the assistance of another person.

Why purchase later-life care

cover – do I really need it?
In 2016, the average fees for a residential
care home were £31,200 per year,
increasing to £43,732 if nursing care is
also required. Over the last ten years,
average residential care home costs have
risen by 50%; if fees continue to increase
at the same rate, the average cost of
£31,200 will rise to £46,800 by 2027.2
1
The Health Foundation, NHS and social care funding
– three unavoidable challenges, May 2017
2
LaingBusson, Care of Older People UK Market Report,
Twenty-Eighth Edition, May 2017
Continued on page 2
1
Even if you choose to receive care in
your own home, the average cost of
home care in the independent sector is
£14.48 per hour3; so just three hours a
day, seven days a week, will cost £304
per week, or £15,812 per year. You may
not need care in the future, but could
you afford to pay for it if you did?
Will the government not pay for
my care?
Care and support services are not
free and, unless you qualify for NHS
Continuing Healthcare, you are likely to
be expected to pay something towards
the cost of your care.
The local authority will carry out a
financial means test to determine what
you can afford to pay, and what level of
contribution they will make – if any! If
you have assets of more than £23,250
in England or Northern Ireland, or
£26,250 in Scotland, or £30,000 in
Wales4, and do not qualify for NHS
Continuing Healthcare, you will be
expected to meet care fees in full.
The Care Act 2014 was intended to
provide greater fairness and certainty
for people faced with the costs of care,
and to help people make informed
choices about the best care and the most
appropriate way for them of paying for
that care. The Care Act 2014 was also
set to introduce a cap on how much
people have to pay themselves; this was
proposed to be set at £72,000. However,
this has now been deferred until 2020,
with the inevitable possibility that it
will be cancelled altogether.
Who should buy later-life care
cover?
Later-life care cover is suitable for
anybody who wants peace of mind that
their care needs can be met if necessary,
recognising that less local authority
support will be available in the future.
You may still be supporting children or
grandchildren; or perhaps you do not
want to be a burden to your children or
loved ones if you do need care.
If you are aged between 16 and 84,
you can apply for later-life care cover.
It can be arranged for yourself, or as a
joint insurance policy for you and your
partner. If you choose a joint policy,
there are further options for you and
your partner as to when you would like
the policy to pay out.
How much does later-life care
cover cost?
The cost of later-life care cover depends
on your age, your health and how much
2
cover you need. This amount is called
‘the sum assured’. The minimum
premium is £8 per month, and the
maximum care cover benefit is
£300,000. The premium is guaranteed
and will not change unless you choose
to increase your level of cover.
What if I don’t need care, or
don’t claim on my policy?
If you are fortunate enough not to need
care, a lump sum is paid to your estate
to provide financial protection for your
family or to help with any Inheritance
Tax liability. There is no maximum
term – the cover will last throughout
your lifetime – and if you do not need
to make a claim to help with the costs
of care, 100% of the sum assured will
be paid to your estate when you die.
Planning ahead will help give you your
choice of care in the future, instead of
relying on state provision, should the
need arise in later life.
To find out more about later-life care
cover, and whether this is a suitable
option for you, just talk with your
St. James’s Place Partner.
3
LaingBusson, Care of Older People UK Market Report,
Twenty-Eighth Edition, May 2017
4
The £30,000 limit applies to residential care; for care in
your own home, the limit is £24,000
 H OW LO NELINESS IN O L DER P EO P L E MAK ES T HEM
MO RE VUL NERABL E TO SC AMS
Keith Brown, Director of the Centre for Post-Qualifying Social Work, Bournemouth University;
Lee-Ann Fenge, Professor of Social Care, Bournemouth University; and
Sally Lee, Post-Doctoral Research Fellow, Bournemouth University
Fraud investigators have warned of
people being targeted by scammers who
persuade them to invest their pensions
in self-storage units. The UK’s Serious
Fraud Office launched an investigation
in May, saying that a thousand people
had invested around £120 million into
the schemes.
This is just the latest in a line of financial
scams to emerge, many of which target
older people. And sadly, loneliness
increases the risk of being targeted
by unscrupulous predators, including
financial scammers.
For some people, their only form of social
contact comes from communication with
commercial organisations or scammers.
These can include telemarketing phone
calls, letters from ‘clairvoyants’, prize
draws or catalogues. Strong relationships
can develop between the victims and
perpetrators of financial scams who
maintain a high level of contact.
Some people can receive multiple
phone calls each day or large amounts
of scams in the post. The National
Trading Standards Scams Team, with
which we at Bournemouth University
are conducting research, have told
us of victims who receive over 30
pieces of post a day. Responding to the
quantity of calls and post can become an
administrative job that provides routine
and purpose; which may be highly
valued by the scam victim whose time
would otherwise be unstructured.
A sense of a personal relationship with
the correspondents often develops,
and the value of this relationship to
the victim may outweigh the potential
financial cost of the scam.
Lonely people have fewer opportunities
to meet with others to discuss finances
or scams and are therefore unable to
check with a trusted contact whether
an offer, or relationship, is genuine.
3
Financial scammers are skilled at using
marketing techniques to establish
rapport and familiarity with victims.
The language used is persuasive and
personal, deliberately designed to appeal
to the human need for social contact.
The loneliness of some scam victims can
be exacerbated by feelings of shame and
embarrassment, reinforced by language
sometimes associated with scam victims
such as ‘stupid’, ‘gullible’ or ‘greedy’.
Such words suggest they are culpable,
rather than a victim in need of support.
These attitudes can influence victims’
willingness and ability to report their
experience, and may be part of the reason
why scamming is an under-reported
crime. Because of this, agencies must
respond to scam victims in a supportive
way, sensitive to the reasons why the
individual may have become involved.
Research being carried out by
Bournemouth University in colla-
boration with the Scams Team is looking
at the experiences of victims. They are
also identifying effective interventions
and producing good practice guides
for professionals working with victims
and potential scam targets. One way to
disrupt and prevent financial scams is to
identify the reasons – such as loneliness
– why people are drawn in by them.
Loneliness exposes people to a diverse
range of significant risks to mental and
physical wellbeing. It affects people of all
ages, but is often triggered by particular
life events such as bereavement, poor
health, or cognitive impairment. Three
in ten people aged over 80 in the UK
report feelings of loneliness – higher
than any other age group. (‘Measuring
National Well Being: Insights into loneliness
in older people & well being’ 2015 - ONS.)
Continued on page 4
Building on previous research,
Bournemouth University found that
interventions that focus on wellbeing,
and promoting ways of developing
a person’s resilience and social
networks, are the most successful at
alleviating loneliness. Facilitating social
engagement in community activities
to promote older people’s self-esteem
can help build their resilience. This can
then reduce the likelihood that they will
respond to scams.
Empowering people to safeguard
themselves against scams through
increased awareness is equally
important. Groups set up to promote
financial awareness and literacy can
help, as can learning materials produced
by initiatives such as Friends Against
Scams and ScamSmart.
It is estimated that £5–10 billion is
lost annually by victims of scams, with
the average age of a victim being 75.
In an ageing society, the number of
people over 65 living on their own in
England is projected to increase from
3.5 million in 2015 to 4.97 million in
2030. (‘Projecting Older People Population
Information’ – Oxford Brooks University/
Institute of Public Care.)
This means that unless society makes a
concerted effort to tackle loneliness,
significantly more people could be
at increased risk of being scammed
– it is detrimental to their health and
wellbeing, and to the economy.
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
Members of the St. James’s Place Partnership in the UK represent St. James’s Place Wealth Management plc, which is authorised and regulated by the Financial Conduct Authority.
St. James’s Place Wealth Management plc Registered Office: St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom.
T HE C AP O N C ARE
The issue of social care, and in to the cap in their 2015 election
particular the question of who should manifesto. The question of social care
be responsible for the funding of once again became a major focus of
care, has remained a source of debate attention during the general election
for a number of years. In 2010 the of 2017, with the Conservatives
government set up the ‘Commission unveiling a controversial plan which
on the Funding of Care and Support’ looked set to drop the ‘cap’ and to
to review the current system in include the value of property in care
England. It became known as ‘the cost calculations, which would force
Dilnot Commission’. many to sell their home to cover the
The commission published several cost of care.
recommendations, many of which After some considerable backlash to
never came to pass; but after much the plan, which critics had dubbed
consultation, the Care Act 2014 was the ‘dementia tax’, the government
finally born as a result. announced additional clarification to
the proposal, with assurances that an
The Care Act 2014 represented the
absolute limit to the amount people
single largest change to health and
have to pay for their care costs would
social care policy for a generation.
be included. But, on 7 December, in a
It brought together all existing
statement to the House of Commons,
legislation and national policy on
the government announced that it
adult social care services into a single
would not be taking forward plans
legal framework.
to implement a cap on care in 2020;
Part 1 of the Act, which introduces but instead would undertake a fresh
the ‘universal deferred payment consultation on the issue of social
scheme’ came into force on 1 April care and how to fund it.
2015. The second part was due to A Green Paper is expected to be issued
come into effect in April 2016, but in summer 2018. Yet, for the time
the government announced in July being, it doesn’t look like anything
2015 that it will be delayed until is going to change: the funding of a
2020. Part 2 was set to introduce person’s adult social care continues
financial reforms to the care system, to be subject to means-testing, and
such as a cap on care, which was remains the responsibility of the
designed to limit how many people individual. This is likely to be the case
would have to pay for care. for the foreseeable future, and will
Despite the postponement, the remain a complex and core focus of
Conservatives seemed committed financial planning.
Registered in England Number 4113955.
SJP4171 V14 (04/18)