Care home costs reduce chance of inheritance

By Lenore Rice

A new report claims that 75 per cent of people in England and Wales that go into a care home will see all their savings and property value lost to pay their fees.

Under the current system, anyone who goes into a care home does not have to pay any fees as long as they have no property or assets with a value over £23,250. In those cases the local council pays for the person's nursing home fees. However, anyone above that threshold has to pay for their own care, and a new study by the NFU Mutual insurance group says that approximately 2 million elderly people have had to pay their own care costs in the last 5 years.

Of those surveyed, who had had a parent go into residential care, 77 per cent said that all their parent's wealth had been used toward their care fees and expenses. Nearly 50 per cent said that all savings were used up, and 28 per cent said they had to sell their parent's home in order to pay for the care arrangements. It is estimated that between 40,000 and 70,000 homes are sold each year specifically to fund care home fees.

The findings of the report strengthen the case that fewer people will be receiving inheritances in the years to come. More people reaching pension age are saying that their savings will be used to fund their lifestyle into retirement, and property equity will go into that pot as well - no longer being seen as the 'children's inheritance'. An increasing number of parents are choosing to make gifts to their children while they are still living, for tax reasons, or simply to help out in an emergency.

If you require advice from a solicitor specialising in inheritance tax, tax planning, will writing, gifting, trusts, and other matters, contact Wilson Nesbitt in Belfast or Bangor by calling 0800 840 9293.