Few of us can afford to pay the high cost of long-term care out of our day-to-day income. If you need to pay for care – don’t worry. There are other ways to finance your care.
Before you do anything, check you’re claiming all the state and other benefits you’re entitled to, some of these are not means tested.
Make sure you’ve checked out all the local authority and NHS funding options too.
If you move into a care home and your property is left empty then you should receive full exemption from Council Tax until it is sold.
Is the care you are choosing affordable over the long-term?
Have you had an assessment of your needs from the local authority and would they meet the fees of a care home you’ve chosen if you had to fall back on their funding?
Alternatively would the care provider continue to accommodate you at local authority rates?
Designed to help if you need care straightaway. In return for investing a lump sum you get a guaranteed income for life.
Read more about Immediate need care fee payment plans.
Selling your home and buying a cheaper one could free up money to pay for your care.
Find out more about Downsizing your home to fund your long-term care.
If you need to go into residential care and most of your money is tied up in your home, your local authority can assist with your care costs for the first 12 weeks of your care and offer you a deferred payment agreement.
This means you don’t have to sell your home to pay for care straightaway.
The local authority will reclaim what you owe in fees they have paid during the deferred payment agreement period at a later stage when the house is sold.
This gives you a lump sum or steady income to pay for your care using some of the money that’s tied up in your house, while you carry on living there.
The money must be repaid at a later stage when the house is sold.
You should only consider an equity-release scheme once you’ve looked at all the other options.
However, there’s no guarantee that the returns will cover the cost of your care, and your money is tied up for a long time. So, they’re not generally one of the better options.
“You’d be amazed how many people sell their home, but then run out of money a few years later and end up making do with local authority funding. If only they’d taken independent advice.” – Anne
In a sale-and-rent-back scheme, you sell your home at a discount.
In return, you stay living there as a rent-paying tenant for a set length of time. This is called a fixed term.
This might seem tempting if you want to stay in your home and need to pay for care.
However, you should only consider a sale-and-rent-back scheme as a last resort. This is because:
The Financial Conduct Authority (FCA), the UK’s financial services regulator, is investigating bad practice in this area.
Don’t sign a new sale-and-rent-back agreement without first getting independent advice about your other options.
In some areas, there are schemes called ‘Homeshare’.
You can let a younger person share your home in exchange for some low level support, such as cooking meals or running errands.
This won’t be suitable if you need more complex care.
Did you know?
An independent financial adviser that specialises in long-term care funding is often known as a specialist care fees adviser.
Choosing how to pay for your long-term care is a big decision.
Speak to an independent financial adviser to discuss which option is best for you.
Look for an adviser with the specialist CF8 qualification. This means they are qualified to advise on funding long-term care.
They’ll be able to explain all the costs and risks, and can help with other things, like arranging your will or setting up a power of attorney.
The ultimate aim is to maximise your income for meeting care costs whilst, as far as possible, preserving your original capital.
Find a specialist care fees adviser in your area: