Live long and prosper with good planning

PUBLISHED: 16:41 31 October 2011 | UPDATED: 20:13 20 February 2013

Live long and prosper with good planning

Live long and prosper with good planning

As Benjamin Franklin so rightly said: 'In this world nothing can be said to be certain, except death and taxes.' But maybe there's another - living until you're 100.

As Benjamin Franklin so rightly said: In this world nothing can be said to be certain, except death and taxes. But maybe theres another living until youre 100. Stephen Gibbens, partner at Trustlaw Solicitors LLP in Stockton takes a look at the financial reality of living longer

Like death and taxes, theres no getting away from the fact that in the UK were an aging population. Recent figures show that quarter of people aged 16 today will live until they are 100 or more, which means we will have more than half a million people aged 100 plus in the next 50 years.

Those startling figures underlie a significant reality the current population is ageing in unprecedented and manner without parallel in history, and is a bigger economic threat to us than the current financial crisis. And because of our demographic, the North East may be more affected than most other areas of the country.

Those aged 65 and above in the North East are the only age group projected to grow in size over the next 15 years. In the early 1980s this age group represented 17% of the North East population, but it is projected to increase to 27% by 2031.

So we all have to ask ourselves about our comfort in later life what about the costs of care if you get too frail to look after yourself? How can I afford to live to be 100?

Funding the costs of a care home can run into thousands of pounds a month.

Averagely fees vary from around 400 a week to 1,000, although these are increasing steadily. And you will have to pay those fees if your capital exceeds 23,250 not that unusual these days.

Inheritance tax (you may recognise the older term death duty) used to be the rich mans tax, not something the average man in the street had to worry about. But with a threshold of just 325,000, thats no longer the case. Despite a slow property market, such a limit makes it a very real concern for many ordinary families in the North East.

However, funding for care is very much an everyman tax, affecting every homeowner needing care in later life.

Recently the findings of the Commission on Funding of Care and Support on the current system of funding elderly care were presented to the Government. Two recommendations hit the headlines:

1. An individuals lifetime contributions towards their social care costs should be capped. After the cap is reached, individuals would be eligible for full state support. The report suggests that 35,000 is the most appropriate and fair figure.

2. The means-tested threshold, above which people are liable for their full care costs, should be increased from the current 23,250 to 100,000.

Many already believe that this magical figure of 35,000 will become the total contribution any individual will have to pay. In fact, some savvy financial institutions have already started their marketing campaigns to provide this sum in the event of a care need arising.

However, at this stage, we have to remember that these are simply proposals. The review is yet to receive any form of Government approval or timeframe for implementation and there are those who say this might be a long time coming.

So maybe we should all be planning for the worst - and hoping for the best.

Stephen J Gibbens is one of only a handful of people countrywide to be dual qualified as a solicitor and an independent financial adviser. He has 15 years experience in the sector.

He and his fellow partner at Trustlaw LLP, Rosemary Young, are members of Solicitors for the Elderly ( which specialises in financial care for older people. Stephen is also Managing Director of Trustlaw Financial Services Limited, Newport House, Teesdale South, Stockton on Tees, TS17 6SE. Telephone 01642 601 602

The print version of this article appeared in the November 2011 issue of North East Life

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