If ever there was a time appreciate the value of periodical payments as part of a damages award, surely it is now.
Lump sum investments have been facing significant headwinds in recent months, following the inflationary effects of worldwide lockdowns and war in the Ukraine. Portfolio values are down as a result, which must be a major cause for concern for investors of damages awards.
However, by way of contrast, periodical payments are unaffected by such world events. In addition, those payments are paid tax free for life, with annual uplifts linked to ASHE 6115, a measure specifically created by the Office for National Statistics (ONS), to track changes in the earnings of home carers. As most periodical payment orders are made to cover the cost of care, linkage to the ASHE measure has been longstanding, pursuant to the Thompstone litigation. Peace of mind indeed.
The ASHE figures are released next month, allowing time for periodical payments to be calculated in advance of the usual payment date of 15th December, which is incorporated into many settlement orders. The shortage of carers, along with the need to pay greater hourly rates to help with staff retention, has resulted in much increased care bills in recent times. It is anticipated that a significant proportion of that increase will be captured by the ONS data-collection and reflected in the latest ASHE figures.
Look out for our forthcoming updating email that follows the release of the ASHE data.