One assumes a solution is only required for the identified long term care (LTC) need and that Mr Bak...
One assumes a solution is only required for the identified long term care (LTC) need and that Mr Baker is in good health.
Mr Baker's assets which can be means'tested are in excess of £19,000, so unless there is a dramatic change in either his circumstances or State provision, he can expect to fund his own care.
If Mr Baker needed care today, his income is insufficient to meet the cost, so he would have to erode his capital. Consequently he needs to plan to increase his income at the time he needs care.
One could consider waiting until the event occurs and using an immediate care plan ' but this could make a serious dent in the value of his estate ' again, which he does not want.
A pre-funded LTC plan would be easily affordable and provide the peace of mind he clearly wants.
To calculate how much tax-free monthly benefit he would need one would assess, at current costs, the shortfall in income he has should he need care. We would use the cost of care as the £575 a week fees plus, for example, £25 a week for personal expenses totalling £31,200 a year.
His income would be his pensions (£12,500), a lower rate Attendance Allowance (£1,957) and an amount of investment income derived from his property value (for example, £150,000 @ 4% net = £6,000) totalling £20,457 a year.
The annual shortfall is therefore £10,743 or £895 a month.
A pre-funded LTC plan with this level of benefit, index-linked and payable on the failure of two activities of daily living with premiums paid on a single or monthly basis or a combination would seem appropriate.
