When the time comes for your loved one to explore a care home, one of the biggest concerns comes when considering the cost. Bearing in mind the professional care being offered, it is perhaps unsurprising to find that care home fees can mount up.

We want to take the time to put your mind at ease by explaining the options that are open to you when it comes to funding care. Every individual deserves the very best care possible, and fees shouldn’t present a barrier to this.  Here’s a look at the main funding options that are available.

 

Local authority funding

If your loved one has savings or capital that don’t exceed £23,250, there is the possibility that your local council will contribute towards the cost of a care home. Just how much your council will assist will depend on the type of care that you need and how much that your loved one may be able to afford to pay themselves.

In terms of capital, this refers to savings as well as any property that is owned. There is a possibility that the local authority will disregard the value of your property in certain circumstances. One of these is that the property is your home, and your partner still lives there. You can find out more about this by clicking here.

There is also the possibility of entering into a Deferred Payment Arrangement with the local authority. This sees the local authority funding your care with you agreeing to pay it back from the value of your home. Typically, you can’t use more than 70% – 80% of your home’s value. You may choose to sell your home to repay the council while you are still a care home resident, or you may choose to wait until after you have passed away for this to happen.

If Local Authority is a route that you think is right for you, then you’ll first need to arrange for an assessment to be carried out. Known as a needs assessment, this shows the degree of care that someone may need and establishes how much the council can contribute towards the costs.

 

NHS funding

There is also the possibility that the NHS may be able to assist with care home fees. Whether or not your loved one may be eligible for financial support is not always clear, and the eligibility requirements can often change.

The funding provided by the NHS is known as continued healthcare funding. Generally, it is only available if your loved one has ongoing, complex needs that require healthcare.

 

Private funding

Where your loved one is not eligible for funding from your local authority, or the NHS, it is usually necessary to explore the options that are available for privately funded care. Even if you do self-fund care, there is still the possibility that your loved one could qualify for other financial support.

The most common ways of privately funding a care home include:

 

Equity release:

This is one of the most common ways of funding a care home if your loved one is a homeowner. It allows access to equity in the property without actually selling it.  The two main types of equity release are lifetime mortgage and home reversion. It is important to seek independent financial advice before exploring this option so that you are fully aware of any risks involved.

 

Accessing savings:

If your loved one has savings, then this is an ideal way to fund care home costs. Generally, savings are readily accessible and using them doesn’t involve any risks. Of course, savings won’t be limitless so you may need to explore alternative funding methods before these run out.

 

Using a pension:

If your loved one is at least 55 years old then they can explore using their pension and income drawdown. Providing that a pension isn’t needed for any other expenses, it can make sense to transfer it into a drawdown product that can be used to fund care home fees.

 

Insurance Policies:

If you have any form of insurance policy, you need to check for the following:

  • Is it a life insurance policy with a cash in value that you can use?
  • Is there critical illness cover that can be accessed?
  • It’s rare, but do you have a long-term care insurance policy that you can use? Alternatives are immediate care plans and pre-funded care plans.