Following on from our opening article in this series focusing on planning considerations in later life, we answer the key questions on how the state may provide financial support when care is needed.
What are the primary ways in which care is provided in the UK?
How much can care cost?
As there are variations in the type of care needed, so there are differences in the cost of care.
“Home care” is provided where it is possible to remain in your home but you need assistance with everyday tasks such as washing, dressing and cooking. Typically, this is charged on an hourly basis depending on the amount of care needed, and the national average rate is around £15 per hour.
Where it is necessary to move out of the home and into a permanent care environment, the costs can be much higher. The national average weekly cost of a residential care package is £672 per week, but this increases when more complex support is required and the cost of a nursing home package averages £937 per week nationally.
As seen by the table below, care costs vary considerably between individuals who can’t know whether they’ll go on to develop a mental or physical disability that requires significant professional help.
You can see the breakdown of how care costs vary below:
Will I receive help to pay for my care?
Yes. There are state benefits available to individuals who require support due to requiring help towards personal care, illness or disability.
These include:
- Personal Independence Payment (PIP)
- Attendance Allowance (AA)
- Housing benefits
These payments are unlikely to meet the full cost of the care package so will need to be supplemented by other financial means, such as personal savings and income.
To determine how the state can support the cost of care, the first stage of this process is to arrange a “Care Needs Assessment” with your local authority. The assessment determines the kind of social care that would meet your needs, whether this means adapting your home or moving into a care home.
There may also be financial support available via NHS continuing healthcare funding, which is not means-tested and will be led by medical professionals to determine if you fulfil the criteria. You should contact your care home, social care worker or GP to initiate this assessment process.
What does “Means Testing” involve?
Your local authority will review your income and savings, which can include your main residence depending on the type of care you are receiving.
In England, if your total capital is calculated to be under £23,250 you may be eligible for some level of support, but you will still be required to pay some of the total fees from your income. Different rules can apply in Scotland, Wales and Northern Ireland.
Will my house be taken to pay for my care?
If you are still living at home, need only temporary care in a residential or nursing home, or have a partner or certain relatives living at home, your house will not be included in the initial means-testing assessment.
If it is included in the assessment, but you do not want to sell the house immediately a “Deferred Payment Agreement” can be made with the local authority. In these circumstances, the local authority continues to meet the cost of your care, but a legal agreement is in place to repay the costs when the property is sold.
Wealth Management
Read more about Wealth ManagementRead moreTo determine how the state can support the cost of care, the first stage of this process is to arrange a “Care Needs Assessment” with your local authority.
The assessment determines the kind of social care that would meet your needs, whether this means adapting your home or moving into a care home.
Should I give away money and assets to reduce my capital?
Whilst this may have the effect of bringing your capital under the thresholds set-out, local authorities have the power to investigate instances of “deprivation of assets” so it is not recommended.
Do my National Insurance contributions matter to the level of support I would receive?
No. Whilst any gaps in your National Insurance record can reduce the level of State Pension you may receive; it is not a factor towards the level of financial support you could get in a local authority care funding package.
Does my choice of residential or nursing home impact on my benefits?
In some circumstances, the cost of your personal choice of a care home may exceed the financial support provided by your local authority. In this instance your choice of care home does not reduce your benefits, however, you will need to meet the additional cost yourself from savings, or with help from relatives or friends.
How do I seek advice?
The area of state funding in respect of long-term care planning is complex and advice should be sought before making any decisions from a suitable qualified professional, such as from the Society of Later Life Advisers (SOLLA).
MHA have multiple financial advisors who have been accredited via the Society of Later Life Advisers (SOLLA) and have experience and the skills to advise individuals and their family in this complex area of financial planning advice.
Should you require specialist advice on funding long-term care fees, please contact our team.
This article should not be construed as a personalised recommendation. The most suitable solution for you will depend on your own personal circumstances. No action should be taken without seeking further formal advice.
MHA Moore and Smalley is the trading name of Moore and Smalley LLP. Moore and Smalley LLP is regulated by the Financial Conduct Authority, FCA registration number 448716.
