Care Plan and Investments - Mabel

Mabel aged 84 had suffered from dementia for a number of years, during which time her husband had been her primary carer. On his death, the extent of Mabel's confusion, compounded by her macular degeneration, became apparent to the rest of the family. As she was unable to cope at home and was becoming a danger to herself, the family arranged a trial period in a care home.

Worried about the cost, they were at a loss to know where to turn until March 2004, when they contacted NHFA Care Fees Advice and were immediately put in touch with their local adviser, who saw them within days.

Mabel owned her own home and had a small amount of capital, in total about £140,000. She received a State Pension, a small Occupational Pension and, at that time, lower rate Attendance Allowance. She also had an income of about £250 per month from a family trust. There was a shortfall between the cost of her care and income of just under £550 per month.

Taking the worry out of paying for care

Mabel's adviser recommended that the family claim higher rate Attendance Allowance, immediately reducing the shortfall. He then provided a comprehensive report showing the family a range of options for the funding of Mabel's care, indicating the potential financial consequences of each.

The option the family preferred was to use an Immediate Needs Care Fee Payment Plan to fund the shortfall, while investing the balance of her funds in a combination of a high interest deposit account, to provide spending money and to cover contingencies, and longer-term investments structured for capital growth.

Detail: These incorporated guaranteed death benefits, to guard against adverse short-term fluctuations in the investments. One of the family's major concerns was that they were a long-living family and that, apart from the dementia; Mabel was very fit for her age.

Mabel's adviser, having obtained quotations from several Care Plan providers, showed that the most economic single premium to generate the required extra income of £550 per month, including spending money for Mabel, would be £40,077. This left £20,000 to be kept on deposit to cover contingencies and any other needs Mabel had, including birthday and Christmas presents that the family knew she would want to give; £40,000 for investment into a Commercial Property Fund and £30,000 into a Cautiously Managed Fund, both with death benefit guarantees.

Three years later, the Care plan has provided £21,093 in income and the investments have grown.

Mabel, though increasingly confused, continued to enjoy good health. Her family was delighted that Mum's care fees were being covered, that she would be able to stay in the home where she felt secure and that, when the inevitable happened, subject to investment performance, there would be a significant estate from which they and their children would benefit.