Elderly may be relying on loans after cap changes

The elderly care cap may not help as many people as expected when the cap was doubled.

09:36 20 July 2013

The cap has been announced for elderly care, but it was set much higher than expected so the previous arguments that the cuts would allow more people to receive the help they need may perhaps seem to undermine the actual resulting cap.

Hopefully the cap that has been instituted will allow those who need it to receive help, but in the event that it doesn’t, there may be elderly people without the necessary means who may try to rely on loans if they encounter financial crises.

Here are a few things that should be kept in mind if you are considering loans:

• Alternatives—before you decide to get a loan consider if there are other alternatives. If you’re in retirement the repayment could take funds that you need for other things like groceries. If you are able to sell some property or take advantage of other programs to seek assistance, you may want to go that route before trying to obtain loans that could end up being difficult or impossible to repay.

 

• Shop around—if you’re already in retirement and you’re in need of loans without any alternatives to assist you then make sure to search for the best terms and interest rates. Also be sure that the expectations have been disclosed in full so you know the full extent of what you’re getting into.

 

• Communicate—make sure that any beneficiaries or heirs are aware of your plans to take out a loan. You should look for shorter terms for your loans so you’ll be better able to repay the money.

 

• Financial advice—if you aren’t sure if you should take out loans, try consulting a professional to make sure that you make the best decision about your finances that is possible. They may also have information about the effect on inheritance tax.