Financing a care home: What you need to know

Caroline Cassidy
senior woman with her home...
senior woman with her home...

Whether due to illness or simply being unable to cope at home, many of us will require a little extra help by way of a care home as we get older. And sadly, they don't come cheap. According to research by Laing and Buisson, annual fees for a care home can cost anywhere from £28,000 to £38,000, depending on location and type of care.

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It makes sense, therefore, to plan ahead, so whether you plan to fund it yourself or think you might need some financial support, here's what you need to know.

Check with your local authority
Your local authority may be able to provide financial support to help fund your requirements, depending on your particular circumstances. If you have assets of less than £23,250 (in England), you may be entitled to funding. A needs assessment will first be carried out to establish whether you are eligible, and if that proves to be the case, you or your relative will be provided with a care plan detailing how the charges are worked out and what is payable. Most councils have a maximum amount that they will pay by way of funding, but the rate will vary depending on what level of care is required.

You should be able to choose from a number of homes that have space available and are able to cope with your needs, although if no places are available, the local authority should pay extra to find somewhere that can meet your needs, and if you have family and friends nearby, they should provide funding for a home in the local area.

Help from the NHS
Though quite heavily restricted in terms of eligibility, the NHS does fund some care home places. Called NHS Continuing Healthcare, this type of funding may be offered if you or your relative's condition is considered particularly severe or complex. NHS-funded nursing care is also available for specific needs, but be aware that only around 10 per cent of care home places are fully funded by the NHS.
Fund your own care
Where financial support is not provided by the local authority or NHS, you will need to fund your own future care. It is wise to seek independent financial advice to establish the best way to meet the costs, for example, via equity release if you own a home, and what to do with assets such as your property, should you make the move to a care home. While the cost of care is not cheap, the advantage of self-funding is that you are free to choose your own home, whether simply residential or a nursing home, giving you a wider choice. If you are planning for your own future or are helping a relative to fund their care, the Society of Later Life Advisers can provide specialist advice.

Have you been involved in helping a relative to finance their future care? What advice would you give to others? Leave your comments below...

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