Self-funding care

Helping you to understand how to finance long-term care

At Oxford Aunts we have helped thousands of families better understand how they can finance care of a loved one whilst providing guidance on any funding they may be entitled to. If your financial circumstances mean you are not eligible for any social care funding or healthcare funding, then you will need to finance care yourself – this is commonly known as ‘self-funding care’.

It is prudent for families that are self-funding care at home for an older loved one to begin planning as soon as is practically possible. This means you have more options as to how you can finance care – investments in bonds, realising savings and investing in property are just some options to save or invest for your future.

However, there are two specific care financing options available to those who are self-funding their care. Here we explain two options available to you.

WILL I HAVE TO SELF-FUND CARE?

In England if you have capital of more than £23,250 or your weekly income is higher than the cost of your care, you will usually have to pay for your own care.

Even if you believe you will have to fund your own care it is always a good idea to involve the council. Everyone is entitled to a Financial Assessment or means test to determine if the council will pay towards the cost of your care. This financial assessment is free and occurs after a need’s assessment or carer’s assessment.

This assessment will look at your financial means including your income (such as pensions or benefits) and capital (such as savings or property) to determine whether:

The council will pay for all of your care
The council will pay for some of the costs of your care
You will have to self-fund care

It is important to remember that in certain situations where you are financing care in your own home, then the value of your home will be excluded from the financial assessment.

Once the financial assessment is complete, you will be informed as to whether you are entitled to have all or some of your care paid for. If you are entitled to receive support, this will be provided via a direct payment as part of your personal budget.

A CARE FEES ANNUITY

A care fees annuity is basically an insurance policy to fund care fees. If you are self-funding long-term care then you must have your needs assessed by a specialist who will determine what your forecasted care needs would be in the future. They will then determine a fee that would cover the cost of care for as long as it is required.

A care fees annuity can then be purchased for a one-off fee and as and when care is needed the income from the plan is paid to your chosen care provider, whether that is a care home or you receive live in care in your own home. The policy is exempt of tax under HMRC policy and is index-linked which means you are protected against rising inflation.

There are many financial organisations who offer care fees annuities. Oxford Aunts works in partnership with Society of Later Life Advisers (SOLLA) who helps people and their families in finding trusted accredited financial advisors who are experienced in working with and understanding financial needs in later life. Working with a specialist advisor like SOLLA gives families much-needed reassurance that they are getting the right advice that is regulated.

EQUITY RELEASE TO FINANCE CARE FEES

If you are a homeowner and 55 years or older, you could consider an equity release scheme. Whether you are self-funding care at home or planning on moving into a residential care home, this scheme allows you to release equity in your property to finance the care you need.

This means you can stay in the comfort of your beloved home and receive live in care without having to sell your home to move into a care home and fund care home fees. There will be factors that impact the amount you will be able to draw out including the type of equity release plan, the value of your property, your age, health and lifestyle.

LOCAL AUTHORITY SUPPORT

Whilst you may have to self-fund the care you need, it is worth checking with your local authority to see if there is any financial support they can give you that will contribute to cost of care. There are discounts offered for council tax, disability allowances and an attendance allowance that families can access to receive care at home.

IF YOUR FINANCIAL CIRCUMSTANCES CHANGE

If your income drops or your capital falls below £23,250, you may be eligible for financial help from the council. A new financial assessment must be undertaken to determine your eligibility.

If you contact your local council at least 3 months before your finances change, you may be entitled to a reimbursement. You will not be reimbursed if you contact the council after your capital falls below £23,250.

TALK TO US ABOUT YOUR LIVE IN CARE NEEDS

Call our friendly and approachable care advisors today to arrange an assessment of your care needs. This will give you a better understanding as to the cost of live in care. We can then help you to explore what financing or funding is available to you and your family.