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Who pays for long-term care? How will you foot the bill if you need long term care in your old age? Independent financial advisor Jacqui Cummins tells MARIE TURBILL why the Government's proposed cap on the cost of elderly care may not be the fail safe solution it seems.

THE tricky subject of funding long-term care for the elderly has once again hit the headlines following the publishing of the Government's social care white paper. One topic under discussion is the potential introduction of a cap to the costs a person would have to pay should they need long-term care in their old age, with suggestions that the cap could be between pounds 35,000 and pounds 100,000.

It may seem a fail safe solution that lifts the burden of spiraling bills, but Jacqui Cummins of Hartlepool's Steadfast Independent Financial Advisers Limited is concerned.

"Many people may have misinterpreted the recommendations and mistakenly believe that any cap on funding care means that the maximum they would have to pay - should care be needed - is the amount of any cap agreed, sadly this is not the case."

She explains the total cost of a care home covers many expenses, including accommodation and living costs, which usually account for the bulk of the total fees payable.

These costs are not included in any cap on costs and must continue to be paid in full even if a cap is ever introduced.

Jacqui fears many are now being lulled into a false sense of security that all they need to do is earmark a set amount aside for future care costs and the remainder of their assets will be protected.

"Often people's greatest fear is that the family home or other assets may have to be sold to pay for the costs of care and the present proposals do nothing to prevent this. "In recent years many have taken to transferring the family home to family, or placing it in trust in an effort to preserve assets.

"But it is apparent that these measures may fail should care costs arise."

The good news, she says, is that there are schemes available that can both limit the total cost of care fees and also help to protect the remainder of your assets.

And these schemes will continue to be vital after any proposed measures come into force.

To help make the right choices for yourself or an elderly relative she says independent advice is essential.

Jacqui points out that advice in respect of funding care costs is only available through advisers specifically authorised to carry out this kind of work by the Financial Services Authority (FSA).

Additional qualifications are necessary for advisers who work in this specialist area.

"The hazards of seeking advice from advisers not properly qualified and authorised by the FSA was seen recently when a fine of pounds 10.5m was imposed on HSBC for giving unsuitable advice to elderly clients who needed advice in respect of funding the costs of care. "Sadly, many people are still unaware of the options available to them or that this advice and assistance is available.

"Given that this is one of the biggest financial commitments that may be faced in your lifetime, the importance of taking independent advice from a properly qualified adviser cannot be overstated.

"It is crucial that you are made aware of all options available to you before you can make a decision on the most suitable way to fund the costs of care."
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Title Annotation:Business
Publication:Evening Gazette (Middlesbrough, England)
Date:Jul 24, 2012
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