Is a long term care plan right for me?

A care plan will guarantee a specific level of income to help pay for care fees for the rest of the individual’s life. The cost will depend on:

• The health of the individual – Reduces the cost depending on the severity of the condition/illness.
• The age of the individual – Generally, the older the individual the cheaper the plan although this will be taken into consideration with their health status.
• The cost of the care home fees – The Long Term Care Plan cost will rise in line with the care home fees.

The average cost of a care plan of £85,000 may appear to be on the high side, but when set against average annual nursing care home fees of £37,000 this represents just over two years worth of fees. With this in mind it should be noted that the average length of stay in a care home for a "self funder" is 4 years and that 1 in 10 live 8 years or more.¹

You should speak to a specialist care fees adviser for more specific information on costs and suitability of Long Term Care Plans.

¹ Partnership statistics 2010

It is always sensible to get a quote for a long term care plan and especially if you need to be absolutely sure of guaranteed payments to help fund long term care until you die. It will give you certainty and peace of mind. To find out if a long term care plan would be suitable you should seek advice from a specialist care fees adviser.

Pamela Earnshaw

Several years ago, Pamela Earnshaw’s mother had a stroke and began suffering from then undiagnosed Alzheimer’s. Her health deteriorated and she began receiving Local Authority care in the form of assistance with taking medication and meals. Pamela paid for this care out of her mother’s funds.

After a fall Pamela put in place an at-home care package through the Local Authority. Eventually Pamela decided her mother would be better off receiving care in a care home.

In mid-2003 Pamela and her brothers sold their parents’ house in order to help fund the care home. Their parents had split ownership of the house in their will, so half of it went towards her mother's care. The Local Authority provided funding for the care home while the house was being sold.

Having discussed the options with her Specialist Care Fees Adviser, Pamela now funds her mother’s care in part from the income of a Partnership Immediate Care Plan purchased in October 2003.

“It’s saved us money in the long term. It’s a help and an assurance that you’re never going to run out of money.”


Malcolm Austin
When Malcolm Austin's mother, then aged 96, broke her hip and could no longer manage on her own, he knew the family would have to consider a care home. She had been a resident in her new home for 3 weeks when he happened to read in the newspaper about Care Plans.  

"It was only by chance that I read about these products in the newspaper.  Fortunately, my mother had only just moved into the nursing home, so this was still an option we could explore."

He contacted a Specialist Care Fees Adviser who found a suitable Care Plan for his mother.  Mr Austin says that a Care Plan has proved particularly beneficial for his mother.

"If we were simply relying on the capital from the house to pay her care fees, the money would have run out already."

The benefit to his mother is that she knows she is secure in the care home that she lives in for the rest of her life.  She has peace of mind – and so does the rest of her family. Since his mother’s experience, Malcolm has arranged Partnership Immediate Care Plans for two of his mother’s cousins who have also both moved into care homes.

See a video of Malcolm's story.


Mike Ranson
Mike Ranson’s elderly mother was cared for by her husband until he died, at which time she was suffering from dementia.  A few weeks after the funeral, Mike and his six brothers decided they couldn’t keep their mother in her house in Wales, and in February 2005 she moved to a residential care home in Yorkshire.

Mike found a Specialist Care Fees Adviser qualified in giving long term care funding advice, and after discussing various funding options with him decided on a Partnership Immediate Care Plan. This cost £90,256 for a monthly benefit of £1,560 with 5% escalation per annum.

Mike says he purchased the Care Plan because you “don’t gamble with your mother’s future”.  
"The Care Plan provides real security without eroding the remaining estate and it’s great to know that no matter how long my mother lives the Plan will continue to pay a major part of her care."


NB: Your estate may receive less back then originally invested if you die early into the plan.

Long term care plans can come with additional features which may suit your particular situation. These include:

• Index-linking – Some plans may offer to link the level of regular payments they make to you or the care home to the rate of inflation so they keep pace with the changing cost of living.
• Escalation – You may be able to request for the payments the care plan provider makes to increase by a fixed amount each year, say 1-8%, to help cover any future rises in care costs.
• Money-back guarantee – This guarantee ensures that a percentage of the lump sum originally paid to the care plan provider will be returned if you die soon after buying the plan, typically within six months.
• Capital protection – An additional element can be arranged to return some of the original lump sum you paid to the care plan provider to your estate or beneficiaries whenever you die.

• Income tax – If  money paid out by the long term care plan goes directly to a  Care Quality Commission (CQC) registered care home or other care provider, there is no income tax to pay on it. You can opt to receive these payments yourself – for example if you no longer need residential care – but you will then have to pay income tax on it.

• Inheritance tax – By using your money to buy a long term care plan you will be reducing the value of your estate which may help with inheritance tax planning. This can be a complicated area for which you should seek financial advice.

Please note that all statements with respect to taxation in this website are Partnership's understanding of current taxation legislation. The rules governing taxation are subject to review and can change. Tax will depend on individual circumstances.