Long-term care in later life can be financially challenging. Researching the options can help you put in place a strategy to manage potential costs without resorting to selling your property. Regardless of whether it’s you, your partner or an elderly relative who needs care, being well-informed on the options can simplify the decision-making process. With that in mind, we’ll discuss the cost of care as well as 10 ways to avoid selling your house to pay for it.
How much does a care home cost?
Living in a residential care home typically costs £928 per week, whereas nursing homes average at £1,025 weekly. Annually, this equates to about £48,000 for residential care and £53,000 for nursing care.
Costs vary depending on care type, however. Residential homes, providing assistance with daily tasks like washing and dressing, are generally less expensive than nursing homes, which offer round-the-clock care from qualified nurses.
The cost also depends on a home’s amenities and its location. Care homes in certain areas, like London, tend to be pricier.
Why are care homes expensive?
Care homes are expensive mainly due to the comprehensive 24-hour personal care they offer throughout the year, which sometimes includes nursing or specialist care. Residents need regular meals, including any tailored for special diets, along with personal care such as help with bathing, dressing, toileting and addressing specific medical needs.
To deliver these services, nursing staff or carers are required all day and night. Additionally, the homes employ catering and cleaning staff to prepare meals, handle residents’ laundry and maintain the cleanliness of the facility.
Is financial help available?
Yes, financial support is available to those who need it. The thresholds for receiving financial assistance with care costs differ by region and directly influence the amount of support provided by your local authority. As your assets decrease and fall below the upper threshold, the level of financial help you’re eligible for increases.
It’s good to understand these regional thresholds to have a clear picture of the potential support available to you for long-term care expenses. Doing so will enable you to make informed decisions about your care options and the potential financial implications involved.
|England||£14,250 – £23,250|
|Wales||£24,000 (for care at home) £50,000 (for residential care)|
|Scotland||£18,000 – £28,500|
|Northern Ireland||£14,250 – £23,250|
Ways to pay for a care home without selling your home
Most people think they have to sell their home to pay for care, but that’s not always the case. Here are some options that don’t include the sale of your house.
Local authority/government funding
Local authority or government funding for care is means-tested and considers your assets, including your home. Placing your house in a trust or gifting it to a relative to meet eligibility criteria for government support can be complex. Such actions might be viewed as deliberate deprivation of assets, potentially affecting your eligibility. Before going down this route, you need to understand these regulations and seek professional advice before making decisions about asset transfers to qualify for government-funded care.
NHS continuing healthcare
If your care needs are primarily health-related, the NHS may cover them through NHS Continuing Healthcare (NHS CHC). Qualifying for NHS CHC means your care home placement is fully funded. During the assessment, if the council believes you might be eligible for NHS CHC, they are required to refer you to the NHS for consideration.
In cases where you don’t qualify for NHS CHC but still need nursing care, the NHS contributes towards the nursing care cost. This contribution, known as NHS-funded Nursing Care (NHS FNC), is paid directly to the nursing home. For detailed information, refer this page.
Self-funding involves using personal finances, like savings or income, to pay for care home costs. This option is typically considered when your assets exceed the threshold for government assistance. It requires careful financial planning to ensure long-term affordability and may involve drawing from various personal financial sources.
Long-term care insurance
Long-term care insurance is designed to cover the costs of care services that aren’t typically covered by standard health insurance. It provides financial support for various long-term care needs, including both in-home and care home services, ensuring a more manageable financial situation for extended care periods. You will most likely need to be in good health and aged under 75 in order to be eligible for a long term care insurance policy. The best time to take out a policy is when you are in your late 50s or early 60s.
Equity release and downsizing
You have the option to tap into the value of your home with lifetime mortgages, which allow you to unlock the equity in your property without losing ownership. Another choice would be to sell your home and move into a smaller one. This can help you release some equity that can be used to cover the costs of care homes, while still holding onto a property of your own.
Property Rescue provides a fast sale service for homeowners who need to downsize. We can buy your home fast and help you find a new smaller home. With our help, you can get the funds to pay for care in as little as 7 days. Learn more about how we can help.
Annuities provide a reliable income stream. By purchasing an annuity, typically with a lump sum, you secure regular payments that can be directed towards care costs. This financial tool helps manage the risk of outliving your assets, offering peace of mind regarding long-term care funding.
Renting out your property
Renting out your home offers a solid, ongoing income stream, lightening the financial load for healthcare expenses. Plus, you benefit from any rise in property value. Letting is especially smart when the housing market dips, as it’s a savvy choice to hold onto your home instead of selling in tough economic times. Essentially, renting out is a smart strategy to keep the property in the while while generating income. You should speak to an estate agent to find out how much rent you could get for your home and weigh that up against the cost of living in the care home. If renting your home, you will likely need to store your belongings with someone.
Selling assets, such investments, or valuables, can be a practical solution to fund care home expenses. This approach converts your assets into liquid capital (cash), providing immediate financial resources for your care needs. While it’s a significant decision, it ensures you have the necessary funds for quality care.
Family contributions, where relatives chip in for care home expenses, may offer financial relief. This joint effort not only lightens the load on the individual needing care but also binds the family in a shared commitment, committing to quality care without solely relying on the individual’s resources.
Charitable assistance can provide an alternative source of funding for care home costs, especially if you’re facing financial constraints. Various charities offer grants, funds or services to help cover these expenses. This aid can be crucial for individuals who don’t qualify for government support and have limited personal resources.
What if none of the solutions above are possible?
If none of the solutions mentioned make sense for you,and selling your home seems like the only option, then it’s first worth realising that your wellbeing is worth more than a house. Selling your property, affords you the chance to fund the high-quality care that you need to be able to live comfortably and safely.
If you do decide to sell, Property Rescue can help by buying your home in as little as 7 days or according to timescales that you desire. When you sell to us, we pay cash. We will buy the property in any condition, so no need for repairs.
Get a free, no-obligation cash offer for your home now if selling your home to pay for care makes sense in your situation.