The following article is about helping you secure planning permission for a ‘golden-years’ home for mum or dad that not only provides them with a viable care solution, but helps you to invest in your own retirement plans too!
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Well not really… compared to the sad reality for most people, building your own ‘golden-years’ home for mum and dad is often the best financial option available and here’s why…
Putting a loved one in long-term care is one of the hardest — and most stressful — decisions a family has to make. To confront the fact that your mother or father may no longer be able to look after themselves is heart-breaking. And then there is the upheaval of moving them from a home where they may have lived for decades.
But this dreadful situation is made worse for thousands of families every year who are confronted by the minefield of funding long-term care. They can be forced to sell their parents’ home and spend a lifetime’s savings because the state cannot afford to foot the bill.
There are almost half a million elderly people currently in care. But the system is beset with problems, including:
Care funding is a postcode lottery, with some health authorities more likely than others to help towards costs;
Health authorities can act as judge and jury when deciding who gets help;
Just 30,000 elderly people receive NHS support for care;
Typical residential care fees are £25,000 a year, while nursing homes cost £34,000, according to analysts Laing & Buisson;
Local councils paid £1bn last year to elderly residents who ran out of cash — this is expected to increase to £3 billion over the next 20 years; and
Council grants are to be slashed by a quarter.
The average life expectancy for those committed to care homes is just two years. But according to immediate care annuities specialist Partnership, self-funders more typically survive for four years. One in ten self-funders live for eight years in care, meaning the cost could rise to more than £200,000.
Often this means the elderly relatives property asset is sold off to raise the revenue to fund a care home, and this means there is no inherited wealth left to pass-on to the next generation.
As care costs escalate year on year the situation is only going to get worse, and this puts your own retirement plans at risk too, as inherited wealth is less likely to trickle down the generations.
Mum’s £250,000 savings are gone
Cecile Harris, 88, has eaten through more than £250,000 from a lifetime of work — but still doesn’t qualify for full funding. Yet Mrs. Harris is unable to walk, eat or go to the lavatory unaided, and is in poor mental health.
She suffered a stroke in December 2003, and went in to a care home near Oxford in 2004. Her three daughters, Gillian, 63, Jennifer, 61, and Carolyn, 58, have fought — without success — to secure their mother NHS funding.
During this battle, they have had to sell her £188,000 home, spend her savings of £30,000 and use her income from her own state pension and two widow’s pensions from her husband Charles. He died 20 years ago, but served for six years in the RAF and for 30 years in the police.
Mrs. Harris’s care home costs £106 a day — and the total bill for a week runs closer to £800. Initially, local social services provided £108.70 in funding. But last March Mrs. Harris’s own savings began to run dry and fell below the £23,250 needed to qualify for more. Yet she will still need to pay £200 a week for her care.
Gillian, Jennifer and Carolyn (pictured from left with their mother) have now enlisted the help of lawyers as they try to fight their case for full funding.
‘I’m incredibly angry,’ says Gillian. ‘We have tried everything. But it seems you have to be at death’s door to receive free care from the NHS. Why did my mother and father work and save all these years? The money is just eaten up by the system.’
At Thomas Studio we have found the best solution is to use the planning system to support the care needs for elderly relatives.
It is a fact that extending independent living helps to maintain a healthier well-being for body and soul, helping elderly relatives live longer and live more independently, compared with those that are institutionalized in care, sooner. Independent living means your mum or dad is less likely to need assisted care and this can help save money too.
If you have land in the family and space adjacent to an existing dwelling that could be used to create an annexed, or detached new build home, a ‘golden-years’ home could be designed for this plot to suit the longer-term care needs of an elderly relative.
These are some of the ways in which a new build dwelling can be specifically designed to meet long-term care needs for an elderly relative. And the planning system supports local care need – especially as it helps relieve the financial burden of care that often falls to the local authority to support.
Whilst there is a national housing crisis, government is forcing local authorities to build more homes. This means it is more likely to gain planning to create a new build care home for mum and dad in their ‘golden-years.’
The great thing about this care option is the value of the new build asset is retained within the family, and when the inevitable happens and your elderly relatives pass-on the property asset can be used to offset the costs of providing care; or be used to meet your own needs too!
As a population we are living longer, and with an ageing population the need for care is growing, with the time spent in care also increasing. However, a fifth of the UK (20%) have no idea who will look after them if they have care needs in old age, according to research released from Bupa. Nearly three quarters (73%) think they will have care needs in older age, but only around half (51%) expect their family to care for them.
The Bupa survey reveals that old age is a regular consideration. Professor Graham Stokes, Global Director of Dementia Care, Bupa says: ‘The perception that older people aren’t valued by society is concerning and needs to be addressed. The proportion of people over 80 is expected to increase almost fourfold over the next 50 years… the role they play as well as their needs and desires should be recognised.
‘It’s clear from the research that people have some reslistic concerns about their needs and potential health challenges in old age, but old age can be a happy and fulfilling time when people are valued and treated with respect.’
This is what Kevin McCloud said when we caught up with him to see what he had to say about meeting the needs of an increasingly ageing population. http://www.thomasstudio.co.uk/kevin-mcclouds-views-on-a-golden-years-home-for-mum-dad/
Despite concerns about getting older, people are optimistic that they can still live a fulfilling life, with the majority of people believing old age will not stop them living life to the fullest. As we age, our preferences and personalities remain individual, which is why, if care is required, it should be provided in a way that meets our needs and wishes.
Care of the elderly can take on many forms. It can be provided in a secure environment, such as a residential care home or nursing home, or as we have found at Thomas Studio it is better in many cases if elderly relatives can choose to have their care provided in close-proximity to their relatives and in the comfort of their own purpose built home that is designed to meet their care needs.
Planning permission for a new 2-bedroom dwelling can raise the value of land substantially, such that you can borrow against the value of this land. And if you add to this your elderly relatives existing home, which could be sold to resource the costs of the new build.
A purpose designed care home means that the property is ideally suited to support the long-term care needs of an elderly relative and assist in providing accommodation should a carer need to live-in.
With the benefit of planning permission this can help off-set the costs of care and prevent the property assets being sold off to resource the costs of providing care via other means. This is dead-money, and the family loses out on the value of an appreciating asset over time.
You own a large house on a substantial plot near to an existing village.
Your elderly relatives live elsewhere and find their own home increasingly difficult to manage typically as their health and mobility is impaired.
You gain planning for a two-bedroom dwelling that is designed with long-term care needs in mind.
The value of your land is increased substantially. A building plot is worth in excess of £150,000.
Your parents home is sold and this money is used to construct a care home on the plot. Any spare money is used to resource an insurance-care-plan product [Immediate needs annuity] to provide long-term care in your own home if and when it is needed. Build value £350,000.
The new build asset is held in trust, or owned outright by the children and can be passed on as part of any inheritance tax planning.
The end result is a well insulated purposed designed home that can support the care needs for an elderly relative as well as provide an easier option for family members to provide care assistance.
In future when your parents pass-on the asset remains in the family wealth and it can be used to support your own retirement and care needs in future – as property is an appreciating asset year on year.
Here is a recently completed Thomas Studio project in Herefordshire that has provided a 2-bedroom care home for an elderly relative with space for a live-in carer. The planning permission secured planning for a well designed home in the grounds of an existing house. [LINK]
Some people may find they have to make quick and difficult decisions about their own or a loved one’s care needs. Thinking about the options in advance will help save substantial sums of money in the long run. If you would like to discuss your particular situation, please contact one of our team at the office.