Financing care for a loved one can be a significant concern for families in the UK, especially when it comes to elderly care or long-term healthcare needs. There is no getting around the fact that care is expensive, but having a clear understanding of your preferences, needs and options will help you to make more informed, cost-effective decisions.
There are many different care options; residential spaces such as retirement communities, care homes and nursing homes, or care within your home such as visiting or live-in care. Each of these options will address different needs and come with a different cost. There is a lot to think about but it’s important to try to understand how and where you would prefer to live your life and what your needs might be. You can then start to investigate how much your preferred solutions will cost.
With regard to financing your care there are again more options. Whilst every situation is different, here are some solutions and suggestions you may want to consider for financing care:
1. Local Authority Funding
- Means-Tested Support: If your loved one needs care and has limited savings of less than £23,250, they may qualify for financial help from the local council. A means test will be carried out by your local authority to determine eligibility for public funding.
- Care Needs Assessment: The local authority will assess the care needs to decide on the level of support required. If the assessment shows that your loved one has high care needs, the council may provide funding to help with financing care.
- NHS Continuing Healthcare: For individuals with significant healthcare needs, NHS Continuing Healthcare may cover the full cost of care, helping to reduce the burden of financing care. This is not means-tested but can be difficult to qualify for.
2. Personal Savings and Investments
- Using Savings: Many families use their own savings to help pay for their loved ones' care. However, this may only be an option for those with substantial personal savings.
- Equity Release: If your loved one owns their own home, they might consider equity release as a way to release funds to assist with financing care. This could involve a lifetime mortgage or a home reversion plan, allowing them to access cash tied up in the property whilst still remaining in their home.
- Selling the Family Home: Another option is to sell the family home to help with financing care. This is often a difficult decision but can be a way to cover significant care costs if no other options are available.
3. Care Insurance
- Long-Term Care Insurance: Although not as widely used in the UK, some families may have taken out long-term care insurance policies, which help with financing care. These policies can cover both residential care and home care, depending on the terms.
- Top-Up Insurance: If local authority funding only covers part of the care costs, families can purchase "top-up" insurance to bridge the gap, helping with additional financing care.
4. Deferred Payment Agreements (DPA)
- Deferring Care Home Fees: Some families may enter into a deferred payment agreement with the local council, which allows them to delay financing care costs until the family home is sold. While this option exists, it’s important to note that interest will accrue on the deferred amount until it is paid off.
5. Charitable Support and Grants
- Charitable Funds: Various charities in the UK offer grants and financial assistance to help with financing care. Charities like Age UK or Carers Trust may provide financial support or help access care-related grants.
- Charitable Care Homes: Some charitable organisations operate care homes that offer care at more affordable rates, providing a way to help with financing care without a significant financial burden.
6. Government Benefits and Allowances
- Attendance Allowance: For individuals aged 65 or over, Attendance Allowance provides non-means-tested financial support for personal care costs, and can be worth £3,775 – 5,645 each year. Companies such as Kinly can provide support with the application process.
- Personal Independence Payment (PIP): Those under 65 may qualify for PIP, which can help cover additional costs associated with living with a disability or long-term health condition, contributing to financing care.
- Carer’s Allowance: If a family member is providing care for over 35 hours per week, they may be eligible for Carer’s Allowance, which can offer some financial relief when financing a loved one’s care.
7. Health and Care Financing Advice
- Care Fees Financial Advisors: The Society of Later Life Advisors (SOLLA) provides support and can help families navigate the complexities of care costs. These professionals can assist in creating strategies for covering care fees through savings, insurance, or other financial tools.
- Legal Advice: Consulting with solicitors who specialise in elder law can help families understand their legal options and ensure that they are making informed decisions when it comes to financing care for a loved one.
8. Family Contributions
- Pooling Family Resources: In some cases, families pool resources to assist with financing care. This may involve family members contributing financially to cover the costs of care. However, this approach can put a strain on finances - and relationships - especially if there are multiple contributors.
In summary, financing care in the UK involves various options, from public funding and personal savings to insurance, charitable support, and government benefits. It’s crucial to assess the care needs, available financial resources, and options carefully. Consulting with financial advisors or legal experts can provide valuable guidance when making decisions on financing care for a loved one.
At Hamilton George Care we are passionate about engaging with care decisions as early as possible. Care is expensive, but having a clear idea of your preferences and potential needs will ensure you make better, more informed decisions. We are always only a phone call away and happy to discuss how we can support you and your family as you prepare for care.
