abdcare blog

Immediate Care Plans, one of the financial industy’s best kept secrets


An Immediate Care Plan (ICP), also known as an Immediate Care Needs Annuity, is an annuity that will deliver a guaranteed regular income to help pay care fees. An ICP can be both tax efficient and provide peace of mind with long term care funding, it can be used to fund both community based care and more structured residential or nursing home care.

It’s a suitable option if you:
– are over 50 and require immediate care
– have access to a lump sum to purchase the ICP
– want guaranteed payments for the rest of your life
– are happy with the annuity amount and understand the capital loss implications of early death

You purchase an ICP annuity with an initial lump sum premium. The amount of premium you need will depend on how much you require per month, prevailing annuity rates and it is also based on your age, gender and state of your health at the time you apply.  If the payments are made direct by the provider of the ICP to a registered care provider the income payments are tax free. If the income is paid in this way it does not currently affect your entitlement to disability based DWP benefits.

You can protect your ICP against inflation by having an escalating yearly value, typically 5% to offset the cost of rises in the cost of long term care. You can also link your care plan to the Retail Price Index (RPI).

People that an ICP can help include those who are self-funding and receiving help at home, those who are self-funding and in a residential or registered nursing home and those who receive local authority funding but are having top up payments made by a third person.

The main advantages of an ICP are:
– peace of mind that income is guaranteed until the death of a person needing care
– peace of mind that you will not exhaust your capital
– reduction in the potential liability for IHT for those with an estate in excess of the current IHT threshold

The main disadvantage of an ICP is the capital loss if death occurs shortly after purchase. However it is possible to protect some of the loss by purchasing capital protection against early death. You also need to bare in mind that once selected you cannot cancel an ICP. An ICP is definitely not for you if you do not need to pay for your care immediately, if you might want your capital sum back in the future or if you might receive NHS Continuing Health Care.

For further information about ICPs or other means of funding the cost of care in old age please:

– contact our Care Team FREE on 0800 072 86 36 (offices in Devizes, Calne, Chippenham, Royal Wootton Bassett and Marlborough)
– email Wayne Elliott on waynee@awdrys.co.uk.
– come to one of our regular seminars, simply register online.

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