It is difficult to achieve this because of the rules surrounding deliberate asset deprivation. However, there are steps that can be taken. These are a combination of legal and financial planning solutions, so professional advice is essential.
Under the current means testing rules (set out as the Charging for Residential Accommodation Guide (CRAG)), the value of any life assurance policies is specifically excluded. This means that insurance company investment bonds should not be included as capital when the means testing is done.
You could, but if this is done at a time when it is known that care is needed in the near future, the transaction could fall foul of the deliberate asset deprivation rules – with the result that the capital would be included. This may affect you achieving your financial goals.
There are annuity based products in the market that can guarantee a specified level of income for the rest of someone’s life. The amount provided depends on the state of health of the individual applying for the cover. This is a very specialised area and independent financial advice from a suitably qualified and authorised individual is essential. This is not the answer for everybody – for example, those suffering with Alzheimer’s may not have a shortened life expectancy – but it should always be considered.
This factsheet is issued to provide general information about factors you may wish to consider in planning for your retirement and long-term care. Much detail has been omitted in the interests of simplicity. Great care should be taken when entering into any contract with regard to verifying any specific details and no action should be taken on the strength of this information alone.
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