Transcript

SPEAKERS

Scott Gallacher, Rebecca Gotch, Sam Townsend, Martin Stanley

 

Martin Stanley  00:00

Good evening, everybody. My name is Martin Stanley, and I’m here at Rowley Turton introducing you to the latest of our series of webinars on topics which we hope will be of interest or even importance to our clients and perhaps people who would like to become clients. This evening’s topic centers around private medical insurance, and we’re doing things a little bit differently. This evening, we’ve got a couple of guest speakers.  First up will be our very own Scott Gallacher, who’s going to be talking to you about private medical insurance, a few case studies of how it’s important and how it can be used, and also something you might not have thought of before, which is how private medical insurance can factor into your inheritance tax planning. After that, we’re pleased to have Sam Townsend from IHCS, a specialist medical insurer who is going to tell you some ins and outs medical insurance. And he will be the guy to speak to if you actually want to take action on your medical insurance. He’s the expert, which we turn to at really certain. After that, we’re going to hear from Rebecca Gotch from our sister company, Rowleys Accountants, and she’s going to talk about some aspects that will be of interest to you if you’re looking at medical insurance from a business point of view, because there’s some changes in the offering to do with how medical insurance is treated with payroll and as a benefit for employees. So before I hand you over with Scott, a little bit of housekeeping. First, your cameras and microphones will be muted, so don’t worry about that. Also, these are there’s a Q and A questionnaire to facility probably at the bottom of your screen, so you can type any questions that occur to you through the webinar, and at the end, we will get through to that. Other points is a recording of this webinar will be sent to all attendees, so you can watch it back at your leisure if you miss anything, although, of course, you can always just ring us up and ask us if you have any questions, if you have any technical queries, any problems logging on. You can also go to the question answer section there. Last point at the end of this webinar will remind you that we always offer, for our webinars, a copy of the book we promote, which is called Enough, which is to do with our style of financial planning and how you might like to use that planning and making sure that you don’t run out of money in your lifetime. I think that’s everything for the moment. So without further ado, I’ll hand over to Scott Gallacher, charter financial planner here at Rowley Turton, and he’s going to talk us through private medical insurance and why that might be important to you.

 

Scott Gallacher  02:28

Scott, thank you, Martin, for that kind introduction. We start off with growing health needs as we age. Most of our clients, to be fair, are in the 50s, 60s, 70s and 80s. And what we’ve noticed is that there’s a they have an increasing need for treatment as we age, whilst we’re typically living longer and typically are healthy, there are still health needs and treatment that we need. And I think that most of us can’t will not have overlooked the fact that the NHS has struggled, certainly post pandemic, with waiting times, which I think are getting better, but certainly not been in a good place. And the effectively rationing of treatment means that more and more people that we see are turning to private options. Some of those common examples are knee and hip replacements, cataracts, some diagnostics stuff and things like that. Next slide Martin, So, as I say, clients are increasingly self funding via either form of medical insurance, which Sam will talk on about more personal savings andor investments, pension funds, or even equity release, which is essentially a mortgage against your property for people generally or older, and we don’t necessarily have to pay any interest during your life as essentially it rolls up. I’ll explain that briefly later. So we’ve put together three case studies of genuine clients and or people we know, and how they’ve either used private medical insurance and or self funded and the benefits term and also the we cover the inheritance tax angle of this presentation.  So the first were a couple with assets comfortably over a million pounds that we were talking to regarding inheritance tax planning, to be honest, and they actually both needed, kneereplacements, and I think they were on an NHS waiting list at the time. And, just in general conversation, we were like, well, hang on a second. This is, this is daft. We’ve got an inheritance tax problem. We’re talking about various ways of mitigating that, gifting it various strategies, etc, and you’re here with with dodgy knees, not being able to enjoy your retirement. And the current NHS waiting times are somewhere between three and 18 months. I think it would have been longer at the time we speaking to the clients, whereas private waiting times are two to six weeks. So this difference of could be a year, nearly year and a half in terms of getting your needs done. And so, right? So what happened? We persuaded them that this was a really good use of their money, so they went privately and paid for it. They saved potentially a year or maybe more of pain or discomfort on an NHS waiting list. They’re absolutely transformed their lives. They’ve gained a year of what we would call Healthy retirement. So when I do my financial planning with clients, we’re typically looking at three rough life stages. We’ve got working mortgage, kids putting away in your pension to say, from 18 or 20, whenever it’s hard work, till 50/55, 60/65, 67, whenever we retire, then we’ve got healthy retirement from the point we retire till what we term later life, which we typically would say would be mid-80s for most people. And then we’ve got later life, where, typically we’re not as active and don’t spend as much. So in terms of that healthy retirement, if you retire, say, at 65 and you we think the later life kicks in, say 85 there’s a 20 year healthy retirement you have. Well, if you spend a year of your life on NHS waiting list with dodgy knees, not being able to do things you would like to, that’s effectively 5% of your health retirement. Now, if you’re in your if you’re 75 with 10 years of healthy retirement left, sounds awful, but it’s the way I would look at it. But that’s 10% of your healthy retirement. So it seems to be a false economy to wait for NHS treatment on a waiting list for too long rather than pay for it privately. Obviously, if you’ve got private medical insurance, and some will explain that in more detail later, that’s going to effectively pick up the tab for this in most cases, anyway. So that’s even even another reason for not waiting. So anyway, so they paid for this treatment. They gained health retirement. They paid for it because they didn’t have private medical insurance. Should emphasize that their assets were still comfortably over a million pounds. So we’ve still got an inheritance tax problem, but effectively their inheritance tax liability is reduced by £12,000  So how do we calculate that? Well, effectively, they spent £30,000 on the two knee replacements. They therefore have £30,000  less in their estate. So when they die, their inheritance tax bill will be £12,000 less, and the children will receive, you know, effectively, had they not paid for it, they would have had £30,000 in  the estate, £12,000 paid in inheritance tax, the children will receive an extra £18,000 pounds. So it’s not even not the clients really pay for it, just the kids have got £18,000 less, but they haven’t got £30,000 less because the inheritance tax treatment. So that’s what we’re saying about the inheritance tax advantage of either paying for treatment or private paying for private medical insurance. Effectively, it’s the same principle that’s just one client that we’ve helped, not necessarily through arranging private medical insurance, although that would have been a good idea, but just convincing them to spend their money and enjoy it. Second scenario was somebody we knew, not a client. We just did a one off job. Then they were in their 80s. They were very comfortable house with no mortgage, very secure pension, final salaries. Take pension, etc. So quite comfortable, limited savings. And they both need hip replacements, which I think at the time were about 14,000 pound each. So again, some issue. Again, issues with NHS, waiting lists, etc. And again, if we’re talking about healthy retirement, we’re talking about even a shorter healthy retirement. So therefore, even more important that you’re not wasting time, as it were, on a waiting list, waiting for treatment. So again, so second couple, what was the outcome? We had to use equity release to pay for the hip replacement because unfortunately, didn’t have any private medical insurance. And unfortunately, there was no other real resources to fund it. We also topped up their savings at the same time because we wanted some kind of cash buffer to enjoy that health retirement. So the cost of knee replacements was about £28,000 for the two, we topped up their savings, as I mentioned, there’s no monthly mortgage payment, so their standard living is is the same or better, because they’ve got a bit of savings and but it’s important to point out the interest is rolled up on that £28,000, so there is interest on interest, as it were, so it’s not a completely free lunch. The mortgage will reduce the children’s inheritance, and it was important that both the clients understood that and the children understood that. But of course, you talk to the children, and of course they want mum and dad to be fit and healthy and healthy and enjoying retirement. Last thing they want to be doing is going without in order for the children to get a slightly bigger inheritance. The two children are both grown up. They’ve got their own houses. Both got successful careers. They’re both doing very well. They didn’t need mum and dad’s inheritance, and the £28,000 for the for these is going to make next no difference to the children when eventually they receive the money. So they were more than happy for the parents to spend it and enjoy the money. And in terms of waiting times I’ve got here, I think it was 18 weeks on NHS versus six weeks private. So three months gained. And people can argue whether that’s value for money, but in this particular case, I think it really was.  And third case study, a business owner in 40s or 50s. This is actually me. This is actually genuine what happened to me. So I’ve got house for mortgage, I’ve got decent income, and luckily, I’ve private medical through work. I don’t have as much savings as perhaps I should have, because most of my money is in the pension and the business. And essentially what happened was I noticed hearing loss when on the phone. So I’m on the phone to a client but I can’t really hear thiscall so I turned the volume up as much as I could, and still couldn’t hear. And I tried the the phone on the other ear, and it was fine. And I thought, Well, maybe it’s the wire on the phone, the phone coil  as I tend to coil my phone wire up. It’s terrible. But then I noticed later that when I was on the mobile I had the same issue. So I thought, well, obviously it’s not the phone, it’s not the phone wire, because mobiles don’t have phone wires.  So what happened? Well, I was lucky to get into the NHS the same day, which I think was very lucky, and they confirmed it was genuine hearing loss. It wasn’t ear wax or something simple and mundane like that. I was able to make a phone call to the PMI provider and actually it was to a Sam’s company, actually, because I couldn’t remember who my PMI provider was, as is always the case, but they put me in touch to who I needed to speak to.  I was able to see a specialist in within days, so there was effectively no NHS waiting and as soon as practical, that specialist recommended a new urgent treatment, which won’t go into as it would be too gory, but I can tell people privately if they want to know about that. The treatment I needed , I had to have within two weeks of that problem occurring. Obviously, if I was waiting on NHS waiting list, it’s likely that I wouldn’t have got to see the specialist within two weeks. So that opportunity to have that new treatment would have gone and would not be available. PMI improved the treatment very quickly. Paid for the urgent specialist treatment. The cost of treatment, I think, was about two or £3,000. I understand that, because I’ve got private medical insurance, it was effectively cheaper than if I’d gone direct, even if I could have gone direct. And most importantly, the treatment was much faster without as a within that two week time window that was required and without any need to sell funds.  So also, I didn’t have that issue of, oh, do I will this treatment work? Is it good value for money, etc, because it was effectively prepaid, because I had a private medical insurance, so I had no financial consideration of what to do. And for the business, obviously, that was a lot better, because I wasn’t taking time off worrying about my problem. I wasn’t off the stress and again. So if you’re a business owner, and you’ve got not only yourself and your partner in the business, but say, you’ve got key people, how much might you save if they could get treated quicker, if anything was to happen to them, and they would obviously hopefully buy you back to work sooner. So I think there’s a huge advantage for businesses to own it. I’m a complete convert to private medical insurance, because previously I would have been out the NHS will fix you. It’ll be fine. Do I really need it? But having gone through this process, I think it’s been, you know, it’s been worth its weight in gold for me. I think it’s been brilliant. I’ll just run past very quickly again, why? I think the any the inheritance tax angle is important. Most of our clients are, you know, self made and have got significant wealth, most of those cars. We’re talking about inheritance tax problems, or at least leaving decent inheritances to the family and normally children. So as I mentioned earlier, if we’re spending money from the estate, and that estate is exposed to inheritance tax, as he an indirect inheritance tax saving. So if we spent £10,000 from your estate, and whether that was in private medical insurance premiums over a number of years, or if it was for some specific treatment, the real cost to you, or, more importantly, your children, is only really £6,000 because of this 40% IHT saving. So if we use private medical insurance, I pay the premiums, or we’re using our own savings or equity release to fund the healthcare all of those measures effectively reduce your taxable state. So first you say not really paying for medical insurance or a treatment because, effectively your children do, because they get a slightly smaller inheritance. And so it’s not really, it’s not primarily a medical decision, but it’s partly a financial one as well. Worth adding that for some clients with estates between £2 million and £2.7 million, for married couple with children, the IHT saving could be 60% so it’s even more compelling to have the private medical insurance and or pay for treatment privately. T here’s some reasons, some might touch on for why having private medical insurance is better than self funding in terms of getting treatment quicker, etc, as I understand it, but I’m sure he’ll touch on that. So this is just explain this difference about people paying for treatment or private medical insurance. So essentially, you’ll get a copy of the slides, but if you can’t see it, there’s essentially two lines. This is client with more money than they actually need, who is just going to their wealth is just going to accumulate, and this is just savings and investment wealth ignores the pension fund and ignores the house. And this is relatively a genuine crime. And they’re younger, actually this. They’re 60 anyway, but they’re accumulating, so they’re still working. Parents retire at 65 and later life, 85 and because of the cost of private medical insurance and or treatment, yes, it will have less money at the end, when you die, there is, there is a slight difference which accumulates. It is a cost, but fundamentally, that is not a cost to them, in the sense that they just mean they leave slightly less to the children. And the inheritance the children still will be very sizable. The children will not notice that difference. And as I’ve mentioned, slightly lower assets means less inheritance tax for those that have an inheritance Tax problem, that’s what I’m talking about when I mention this inheritance tax saving, therefore holding money and forgoing medical treatment or private medical insurance to protect you from those costs if and when they occur when you’ve got inheritance tax problem doesn’t seem to be the most sensible strategy to me, as I mentioned, younger business owners like myself, premiums generally can be paid for the business. It is a benefit and kind on you. And Rebecca will touch on that later, but effectively, you don’t see the pain yourself, because it comes out the business. So you pay the tax and National Insurance on it, but you don’t pay the full cost of it directly, so it might be considered a tax efficient benefit. In that way, getting money out of the company. It’s also worth remembering that when a business sold, and most people own a business, will sell it eventually, or they exit it, essentially, at some point, then the sale proceeds will eventually be sold to inheritance tax. For most people, I was just like giving the value of their pensions, houses and business sale money is another piece of piece, bits and pieces. So by paying for private medical insurance, now, even through the business, there is, you know, potentially a long term tax efficient saving by spending that money, because effectively, you’ve taken someone out of the business, the business will be worth slightly less because it doesn’t have that money. You will receive slightly less on sale for that, but if that money is then eventually you’re going to be subject to inheritance tax. There’s effectively an inheritance tax saving. So for me, it’s a really good way of using money. Um, just touching on to staff for a moment, as I say, if you’ve got key members of staff and you’re worried about them not being able to work because you’re on a waiting list, or if you’re worried about their motorcycle, if their spouse or children need treatment, which also can happen because medical insurance can cover both staff, but also staff’s family, who have spouse and family. There’s another good reason you might want to consider putting in place that your key team is kind of off work for as little as possible. Should you know seriously ill health happen? So the takeaways are that most clients don’t really pay for private treatments themselves, because cost is ultimately borne by the beneficiaries in terms of a slightly reduced inheritance, your children and also our clients over definition, children would rather see their parents enjoy retirement than suffer on a waiting list and miss out on those precious years of healthy retirement that I mentioned. We’ve only got one life, and my general view as a financial planner is to make sure that we enjoy it as much as we can, hopefully in good health and in comfort. I say for most of our clients, or many of our clients, the IHT, saving, saves around 40% of the cost of treatment or private medical insurance.  Private medical insurance, I’m increasingly convinced it isn’t luxury. If you’d asked me before I had my own issues, I might have felt it was a luxury and felt that the NHS would write to your rescue. But having been through this myself, I’ve also got other clients where they’ve assured me that they’ve had medical issues, and the diagnosis that they got through private medical insurance was much quicker and much better. The treatment they had for really horrible diseases for them and their family had was much more specialist, and it was unavailable on NHS, and that it basically extended people’s quality of life and all their lives in number of years, in some cases. So I think it’s a life choice. It can be tax efficient and life enhancing. And it’s not selfish spend money on yourself. I don’t think, whilst we quite keen, or most of our clients, are keen on passing on inheritance, I think you should favor yourself and your health in particularly first. So I don’t think it’s a selfish thing to spend money on yourself. I think smart, and I say often, it’s what your family, your children, your spouse, etc, would want you to do anyway. So it seems to be a really good idea and a really good way to spend your money. What is money for, if it’s not to enjoy and to be as healthy as possible? So for now, pass over to Sam, who will explain what private medical insurance is and explain a bit more about his company and what they do. Over to Sam,

 

Sam Townsend  18:59

thank you, Scott, for the introduction, great to be here with you all this evening. Now, I’ve got four slides that I would like to present to you all this evening. Now, the key thing is, I’m focusing this predominantly around individual clients, but the the core premise of what I’m going to be presenting to you is replicable in connection with group medical insurance policies as well. So the core elements are transitionable from the individual to the group healthcare policies as we move forward. So Scott, if I could ask you to load up the first slide please. So here we have what is private medical insurance. It sounds a little bit of a basic thing, but that’s generally quite a good place to start. So we’ve we’re all coming from the same position. So essentially, private medical insurance is a medical insurance policy for the treatment of an acute medical ailment. Now the key word there is acute. So thereby something. That is clinically rectifiable Or that can be resolved, so things like hips, knees, cataracts, heart problems, God forbid, cancer. So those are all supported by a private medical insurance plan. However, there are a few things that wouldn’t be covered under a healthcare policy because the policy isn’t technically designed to facilitate them, and they’re really the four key ones are the support of a chronic condition. Again, the purpose of a policy is for acute care, so thereby something that is chronic in nature, things like diabetes, eczema, asthma, would fall outside the scope of what healthcare healthcare policy is intended to do. The second is routine prescriptions. We still do have funded prescriptions in the UK, free in some places as well, so those fall outside the scope of the healthcare plan. Thirdly, accident and emergency care. We have no private any facilities in the UK. Therefore there isn’t the facility to accommodate private A and E treatment, and finally, pre existing conditions. Now the purpose of any insurance policy is to protect you against the unknown and the unforeseen, not what you already know about. So therefore pre existing conditions are not covered under a new healthcare medical insurance policy. Now, at the moment, we have around about seven and a half million people waiting for treatment under the National Health Service. That has increased from approximately four and a half million pre 2019 obviously, that being the start of COVID Now the value of a healthcare policy, as Scott has already touched upon in a couple of different areas, is the ability to expedite treatment and care, so that a healthcare policy will bypass the National Health Service waiting list and allow you to obtain treatment in the most expedient way possible, without you necessarily having to self fund the treatment yourself as well. Now, from our perspective, medical insurance is relatively unique in the landscape of insurances, in the sense that it is something, again, as Scott has already touched upon, a little bit that you are almost guaranteed to use, because unfortunately, as we all get older, life happens. And by that, medical conditions arise. As one becomes older, they become potentially more frequent, in most cases, more complex, and then, by extension, more costly to treat. So the value of a healthcare plan is it? It protects you from those eventualities which ultimately will come around at some point in the future. Now, the Scott has already said again to repeat myself a little bit, but the value of a healthcare policy is the direction of care that you you are able to achieve. So when you are within the National Health Service, to a greater or lesser, lesser extent, they say, when they say where, they say who, with the private health insurance policy, you say, when you say where, and you say who. And perhaps the most important thing is the ability to access care, treatment and drugs that are not available to an NHS patient. Now, I’m sure you will all be familiar with an organization called Nice. Nice are the regulatory body that authorized and approved treatments that can be offered through the National Health Service. Now, unfortunately, what a lot of people don’t realize is that there are a huge amount of treatments that are available in the UK but are not available through the National Health Service. And this is this is particularly important around cancer care. Is specifically where you see in the tabloids, in the press, the ruinous costs of certain Advanced Biological, targeted cancer treatments and therapies that can sometimes routinely cost 10s of 1000s of pounds. A healthcare policy will insulate you from that eventuality and that exposure, because even under the most basic healthcare policy, cancer treatment is fully funded. Now, moving on to why us as independent healthcare solutions, and very simply, we do exactly what we say on the label. We are an independent whole of market medical insurance broker. Our aim is to ensure that our clients have policies that meet their requirements, both in the terms of benefits and budget, but more importantly, that our clients have the foundational knowledge to be able to make a fully informed decision about what type of policy represents their requirements. Goals in the best way possible moving forward, and as part of our process, we will help clients understand the pros and cons of different levels of cover and different mechanisms to help them achieve what they want for their long term goals and requirement. Now, as a broker, the benefit of us is that we are regulated to give advice and guidance. Now, that differs quite dramatically from working with an insurer directly, because they do not routinely give advice or guidance, and they certainly can’t comment on different insurers policies, whereas we do have that ability, freedom and insight to share. Now, as a company, we were founded 30 years ago, back in 1995 by our Managing Director, Phil Neilson, and we were founded originally as predominantly a group medical insurance specialist. Now, as the market has changed and evolved, and as people’s requirements have changed. The market has developed in such a way that we are very much more heavily involved in the individual space now as well. And just to give you an example of that, 15 years ago, 95% of our business was predominantly focused around groups, 5% individual. And now 40% of all of our clients are individuals, and 60% make up the difference that being the group clients that we still support as well. Now, as part of our service, we automatically offer all of our clients a full annual market review, just like you would review your car insurance, home insurance, you will review your pension and financial arrangements. Medical Insurance is no different. So we always offer all of our clients, group or individual, a full market review and analysis each year, and we do that with the intention of achieving two things, one, to secure the best terms possible from the incumbent insurer, much like any other type of insurance, if you don’t ask, and if you don’t negotiate, the insurer will not willingly give you their best price. We do that for you. And secondly, the purpose of the review is to help you consider and explore potential other insurers, if that is something that you may wish to look at as an alternative to the incumbent provider as well. And finally, we don’t charge any fees for our services. We are remunerated by commission slightly differently to the role of certainty who charge fees. But to be clear, any costings we provide would be exactly the same if you went to the insurer directly. So there’s no additional cost to you for us being involved in the process in any way, shape or form. If we can move to the second slide, please, chaps. So moving on to the cost of healthcare. So as we’ve alluded to through the town this morning, and as Scott has addressed, there is value around medical insurance when compared to self funding care, and that we will come on to in a few months as well. But just to give you an idea, so focusing on someone who is uninsured and around about the age of 60, how much is a basic medical insurance policy going to cost them? And that will be a national average of approximately 1000 pounds. Now there is an element of geographical location, geographical location that will influence the premium, but national average around about 1000 pounds. And as we can see from the bullet points on the slide, a base health care policy will fully fund all inpatient day patient care. Fully fund CT pet and MRI scans offer access to all private hospitals and NHS hospitals that undertake private care, and fully fund all cancer treatment, including those drugs that are not available through the National Health Service from the point of diagnosis and as a final point, with the inclusion of a virtual GP service that being particularly important in the environment that we now find ourselves in, where GPs are under so much pressure, and the first hurdle people will often fall at trying to access care is they physically can’t get in to see the GP until it’s three weeks next Tuesday. So that there is that inclusion built into all healthcare policies as a standard feature as well. Now when we think about healthcare policy, because all of the policies are modular, which is very good from a consumer’s perspective, because it allows you to refine and dial in the policy to what you want. But unfortunately, the problem with more choice is that it often leads to more confusion and thereby extension in action. So how we advise when it comes to a policy is we really break it down into the simple elements. And there are two. There is the underwriting. So for someone who is uninsured, that would be something, in most cases, that is referred to as a new moratorium. And then there. Are the benefits which broadly break down into comprehensive, intermediate and basic now, the way moratorium works is actually a lot more favorable than people would often assume. So people have a lot of misconceptions about healthcare, that it is a lot more punitive or restrictive or there is limited value in a healthcare policy because of previous health conditions, people will often also assume that family health just like it would do for certain other life insurance contracts, would be punitive too then, depending on what their family health history is like, but for a personal medical insurance policy, that is not the case. So how the moratorium works is in three key areas, any new condition is covered with immediate effect. There is no qualifying, waiting period or screening required. Secondly, any condition that arose and has been fully resolved five years or ago or more is also covered with immediate effect. And that’s particularly important because people will often say, I had x condition 20 years ago, therefore it will not be covered under a policy in the future. There’s no point in me having a health care plan. The reverse could not be any trouble, as long as the condition has not been present for the last five years and has been fully resolved. It would be covered in the future. Should it reoccur. The big one that people will often lead to the conclusion of is, unfortunately, cancer in that respect. Now, the final thing that is not covered is pre existing medical conditions, and that is anything within the window of five years before you were to start a health care policy. Now the thing that people will often miss, Devil being in the detail is the benefit of the moratorium is, not only does it cover historical conditions and new conditions, but once you have had the policy for a period of two years or more, if a condition has not reoccurred within that two year window, it is automatically included for benefit at a later date, so the benefit being a pre existing condition can ultimately become covered if you have two years symptom treatment and advice free. Now moving on to the benefits of the policy, comprehensive, intermediate and basic now we’ve already covered what a basic policy does, fully funded inpatient and day patient care, fully funded scans, fully funded cancer care. An intermediate policy will include one additional element, and that is outpatient care. So that would include consultations, diagnostics and rehabilitation. And the reason it’s classed as an intermediate plan is because the benefit would most often be capped at generally, 1000 pounds per member per policy year. And then a comprehensive policy would simply enhance that 1000 pound limit to unlimited. Now, in amongst that, there are various other elements that are built into a policy, things like excesses, hospital access, consultant access, but if we’re thinking about the core pillars of a healthcare policy, it is the underwriting and the benefits. If we can move on to the next slide, please, chaps. So here we have, what other care options do you have? I’ve spoken a lot about the benefits of a healthcare policy, and Scott has gave very good a testimonial of his own interaction with the healthcare policy. But there you do have have other healthcare treatment options available to you. There is a national health service free to everybody at the point of use. Now, as we can see on this slide in the table, we have gave a little bit of additional information about what some of those NHS waiting times can be across the country. So there are five very common conditions here, a stent, cancer treatment, knee, hip and a cataracts. So stent, just to be clear, if you’re having a heart condition and you’re rushed into a and e a stent may be fitted as an emergency, but if you are having a pre planned stent fitted that can take anything up to 36 weeks now cancer care. 33%  of all cancer patients are waiting over two months for their treatment to start, which is astounding, unfortunately, now moving on to hips and knees, anything up to 55 weeks, and a cataracts operation, anything up to 42 weeks. So that’s the National Health Service, moving on to self funding. As Scott has outlined, that self funding is an option available to all of you, but the question is, you.

 

Scott Gallacher  34:59

Knowing what we know about the National Health Service and the problems in accessing care, and thereby, the likelihood of you having to sell from treatment is much greater than what it has been historically. Is self funding a cost effective mechanism, in some cases, how much of a war chest do you need to have set aside to fund care moving forwards if you can offset the exposure for 1000 pounds a year there or thereabouts? So the cost of a stent being fitted, 11,000 pounds cancer treatment, ruinously expensive, anything from 28 to 130,000 pounds, if we’re talking about the inclusion of some of these very expensive targeted drugs, which unfortunately are becoming a lot more commonplace, which is fantastic for patient outcomes, but unfortunately extremely costly to have to sell funds and the routine things, hips and knees, 14 and a half 1000 pounds each and a basic cataracts operation, three and a half 1000 pounds per eye. Now the thing with these conditions that we’ve outlined here, most of you will have known people who have had one or several of these conditions individually, some people will be fortunate and never have any of them, but the law of averages, and ultimately, that’s what we’re working here with the law of averages say you will have one or more of these conditions through the course of your retirement, that being from 60 onwards.

 

Sam Townsend  36:36

Now, the final slide we focused on very heavily, people who are uninsured. Now, if you are insured, what options do you have? Do you have any options? And the answer to that very simply is yes, you do. So we will often find people will linger with the same insurer for years, and in some case, decades, because they are fearful to change the policy, because if it’s not broke, don’t fix it. And two things will often be very common with people who are staying with the same short Firstly, because they are uncomfortable and unfamiliar with how a healthcare policy works from a benefits and mechanical perspective, they will assume that for them to have the same level of cover with another insurer, it will not be possible, because that they will have to stay with the same insurer to have the same benefits. If they move elsewhere, they will have a reduction in cover. Absolutely not the case, as long as you are working with a mainstream insurer, the likes of Bucha, Aviva, vitality, WPA and a number of others, they will all offer the same types of policy, the same access to practitioners and the same access to hospitals. Now the second point there being transferring between different insurers with the inclusion of cover for pre existing medical conditions. The assumption that people will often make is, if I move from my insurer, a new insurer will re underwrite me, so that being a moratorium or they will exclude certain aspects of my medical history, what people unfortunately are not aware of. Much like car insurance, you can go from one insurer to another and take your no claims discount with you. You can move between different insurers and take your medical history with you. Now, each insurer has what’s called a medical transfer declaration. Now, subject to how you are able to answer those questions, an insurer can offer you exactly the same terms, conditions, underwriting and inclusion of pre existing conditions as your incumbent insurer, but generally for a much more favorable premium. So the problem there being people languishing with the same insurer through inaction, unfortunately, pay significantly more over a long period of time than people who proactively move around different insurers over every 2345, years, whenever circumstances permit, which will see a much more stable and suppressed period of premium over the long term. Now, does your policy still meet your requirements if you’ve got a healthcare policy and if you’re in the position where you’ve had it in place for two, 310, 1520, 30 years, as a lot of people will do, does the policy you have still meet your requirements now from when you first took it out 20 years ago, most people it will not. So as part of our review, we take people back to basics and essentially say, This is what healthcare policy does. This is what you want it to do with that information in mind, does the policy you have now represent what you need it to do moving forwards? And the final point there being loyalty, people will often assume, if I stay with my same insurer. So when I make a claim because I’ve been with them 40 years, they will give me a less of an increase on my premium. Unfortunately, loyalty does not pay, and the reason behind that is because, in short, policies are all based on what’s referred to as a no claims discount scale, just like car insurance, if you claim, you will see a corresponding impact in your premium. It does not make a difference whether you have been with the insurer 12 months or 10 years. The net consequence would be exactly the same. Now the final point here, to close my part of the presentation, people exiting group medical insurance policies, just like people who are currently insured on personal policies. People who are exiting a company healthcare plan will often assume that they have to stay with their company provider to maintain their benefits and to maintain their cover of pre existing conditions, just like it is not true on personal policies, nor is it true for those who are exiting group medical insurance policies. And finally, pre retirement planning, something that we can help you do in conjunction with Scott and Martin. So if you are covered under a healthcare policy and you want to build in a long term financial strategy to reflect your medical insurance clients moving forwards, we can absolutely help you do that, and we would encourage you to reach out to ourselves through the rolly Turton team 12 months in advance of you of your retirement, so we can discuss the options, the pros, the cons of different things, and partly to give you a little bit of guidance and insight as to dos and don’ts when in your last 12 months of A medical insurance contract, so my part of the presentation now here is done. I look forward to any questions at the end, Scott, I will hand back to you.

 

Scott Gallacher  41:49

Cheers. Thank you very much. Sam, that was a fabulous kind of summary of private medical insurance and what IHCs do. I think hopefully a lot of us have learned a great deal about private medical insurance. I’ve certainly learned some new things listening to that. Have we now pass on to Rebecca Gotch, who’s the payroll manager at rollers, and this is to with business owners and the payrolling of benefits, and she’ll explain more regarding private insurance.

 

Rebecca Gotch  42:16

Thank you, Scott. Hi everyone. Thank you for having me. Scott just said, I’m just said, I’m just going to spend a few moments giving you a quick overview of payroll in benefits, and particularly in the context of private, private medical insurance, which ties in nicely to today’s session. So if we just move on to the next slide. So what is if we just go back a slide, sorry, there we go. So what is payroll and benefits in simple terms? It’s a way of reporting employee benefits like private medical insurance or company car insurance through your payroll in real time, rather than reporting them after the year end on P 11 D. This makes things more streamlined and accurate as any change to benefits during the tax year are reflected immediately. One key point to note is that pay line benefits actually becomes mandatory from April 2026 so now’s a great time to start understanding that process and get ahead of this change. So if we just move to the next slide, I’ve just done a very quick example using private medical insurance. So if you had an annual cost of private medical insurance of, say, 288 pounds per year, and the amount was split across the pay periods. For this example, this is monthly pay. It’d be 24 pounds per month that’d be added to your employees taxable pay as a notional amount. So this means that that employee pays the right amount of tax as they go along, and there’s no need to submit AP 11 day at the end of the year. So if we just move to the next slide, if this does sound like something, you’d need help navigating, especially the mandatory change coming in next year. Our payroll team at railies can assist with this. We have a number of clients who process their own in house payroll. We only get involved when changes like this come in place to just help them get set up and ready to go. So if we just move to the next slide, and obviously, if you are looking to outsource your payroll and remove that burden, then please feel free to get in touch. You’ll see on the slide a list of the payroll services that are included within that so if we move to the last slide, thank you for your time. I’m here to answer any questions at the end, but I’ll hand you back to Scott and Martin. Thanks. Thank

 

Scott Gallacher  44:41

you very much for that. Rebecca, quite nice, and as a business owner, we’ve already had a chat about the payrolling of PMI as well. So that’s an issue that we, I think, are aware of. So in summary, we’ve observed, and there is clearly a growing or growing health needs as we age, we’re age. As advisors and our clients are certainly aging as well. The NHS clearly has continued issues, regardless of who’s in government. We’ve run through self funding options. We’ve included PMI in that. But I think Sam would argue it’s separately we’re fundamentally paying for sales, rather than it being through the NHS. We’ve discussed about the potential indirect 40% inheritance tax saving, or 60% inheritance tax saving for some people with large estates, Sam’s ran through various PMI options, from comprehensive to well said, essential, but I believe it’s called Basic cover. Rebecca has told you about the payroll and benefit rules for businesses, and we’d find say it’s not selfish. Spend money on itself, is smart enough to what your family would want. Just very quickly, we mentioned we are primarily a financial planning practice, and we have a book written by Paul Armson which explains the financial planning process we follow. If anyone who hasn’t got that copy of that book wants to drop an email to Martin at ready turn com, just for your name address with someone out in the post. It is a physical book. It is a paperback, so we can’t send a PDF, unfortunately. So we don’t need name address. And finally, question answers. Think I’ve only got couple which would be super quick, one for Sam and one for Rebecca. So for Sam, the question is, what are the average annual premiums for somebody aged 70 and age 80. I think you gave the age 60 figure, yes.

 

Sam Townsend  46:27

So there are a number of factors that can go into that answer, essentially, type of policy, excess geographical location. But when I saw the question pop up, I’ve just had done a quick quote in the background. So to give you an idea, someone who is 70 an annual premium will be approximately for a basic level of cover or essentials would be anything from 1285 pounds and 40 4p to be precise. And that will climb for someone who is 80 to approximately 1500 pounds a year. But again, when compared to the cost of something like a knee replacement at 15,000 pounds, that’s a decade’s worth of premiums just to offset the cost of one fairly routine medical condition.

 

Scott Gallacher  47:14

Fantastic, Sam, thanks for going with that. And just a question for Rebecca with the payrolling of benefits and effectively, I suppose the disappearance of P 11 D, does that mean that some people who were having to complete self assessment tax returns will find that they don’t need to do that now that that’s gone?

 

Rebecca Gotch  47:33

No, I believe that they’ll still have to, unfortunately, complete self assessments. I know that’s not what anyone wants to hear, but yeah, I believe it will actually those that used to have a PLM and D solely on the payroll and weren’t actually paid for a payroll either, they’ll then amounts will actually go on your self assessment, and that would actually be paid for your self assessment. Now, however, the legislation for mandatory payroll and benefits is not being released till July this year. So we’ve we’re still open to some changes, because HMRC are leaving us till till right at the last minute before they give us any more details.

 

Scott Gallacher  48:10

Fantastic. Cheers. Thank you very much for that. Rebecca, um, if anybody has any questions after the webinar, if you go home and think, oh, I should have asked that, if you drop an email to either myself, scott@rowleyturton.com or Martin,  martin@rowleyturton.com and if we can’t answer it, this question for Sam will Rebecca, we will pass it on and get them to answer it. Thanks for your attendance tonight. And just as a reminder, you will get an email in a few days with both a copy of the slides and a copy of the recording. There’s also copies of previous webinars are available on our website. Ready? Turton calm, so if you go to there, look at the top right hand corner for resources and webinars, and we’ve done them on a numerous subjects, and you can listen to them and watch them at your leisure. Cheers. Thank you very much. And good evening. You.