Case Study on Lifetime Mortgage and Care Plan

This case study outlines the financial situation of Catherine, an 88-year-old widow with dementia who requires 24/7 care. Due to her condition, she appointed her children as attorneys under a Lasting Power of Attorney. With an annual care cost of £60,000, which is expected to increase by 5% each year, and £60,000 in savings, Catherine does not qualify for local authority or NHS funding. The study details how her attorneys can utilize the equity in her £600,000 home to fund her care through an Interest Roll-up Lifetime Mortgage. The financial adviser recommends borrowing £240,000 to purchase a Lifetime Care Plan, which guarantees an income for her care provider. Additionally, the case study discusses the risks associated with both the lifetime mortgage and the care plan, including potential impacts on state benefits and inheritance. The recommended solution aims to ensure Catherine can remain in her home while managing her care costs effectively.