Health and financial security are really important issues and become more so the older we get. No one knows what the future holds but it is possible to exercise a considerable amount of control over some very significant aspects of old age.
Funding care in later life involves planning for the costs of specific needs unique to older people.
Aspects like where you live, how much capital and income you have at your disposal and perhaps most important of all, how you pay for your care.
This is particularly significant as care costs in England are not covered by the state in the way that health costs are. In fact, anybody with assets worth £23,250 or more – including the value of their home – is required to pay for all of their care. This means that without the right planning, people might have to use up their savings and other assets to cover their care costs and this may even mean having to sell their home.
Paying for residential care in a care home is expensive
There is some help available to meet the cost, but the care system can be complicated and difficult to find your way through. You may also be eligible for financial help from your local council or, in some circumstances, from the NHS.
If you are eligible for funding support, your local council could pay some or most of the fees. Your local council will carry out a care needs assessment which includes a financial assessment, called a means test, that looks at your income and savings.
The means test will assess whether you can afford to pay for your own care and whether you’re eligible for financial help from the council.
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How much will I have to pay for care?
Care home fees will vary depending on the area that you live in, the individual care home itself and your personal financial circumstances. Costs range from around £600 a week for a care home place and over £1,000 a week for a place in a nursing home.
Your local council will calculate the cost of your care and how much you have to contribute from your resources. This figure must be realistic and allow you to access an appropriate level of care in a local care home.
If all your eligible income is taken into account in your ‘means test’ (how much you can afford), you must be left with an income of at least £24.90 per week. This is known as your ‘Personal Expenses Allowance’.
If you have health care need the NHS may also contribute towards the cost of your care. If you’re eligible for NHS continuing healthcare, your care home placement may be free.
How could my finances and property affect my fees?
If your local council carries out a care needs assessment and finds you need a care home place, they will do a means test. This may take into account the value of your property, if you own one, as well as your income and savings.
Here’s how the means test for social care will look at your capital (your savings and property) and how this will affect your care home fees.
|Your capital||What you will have to pay|
|Over £23,250||You must pay full fees (known as being self-funding).|
|Between £14,250 and £23,250||The local council will fund some of your care and you’ll contribute to the rest.|
|Less than £14,250||This will be ignored and won’t be included in the means test – the local council will pay for your care. However, they will still take your eligible income into account.|
Certain types of income, including certain disability benefits and pensions, may not be counted in the means test. This is the same for certain types of capital, including insurance bonds. All other income and capital can be taken into account.