If you are experiencing trouble with everyday tasks such as cooking, dressing, getting in and out of bed, or need specialist care, then homecare (also called home help or domiciliary care), is available to help you continue living in the comfort of your own home.
The cost of care services at home can be met in a number of ways, depending on a number of factors, including your income and savings. In certain circumstances you may be eligible for financial support, so below are a number of ways of paying for home care.
This information is offered as a guide only and is correct at time of publishing.
- Local Authority Funding
- Care Annuity
- Long Term Care Insurance
- Equity Release
- Income from Investments
- NHS Continued Healthcare Funding
Local Authority Funding
If it’s determined that you need care services, either at home or at a care home, and your capital is below £23,250 in England, or £25,250 in Scotland, or £23,750 in Wales, you’ll be eligible for financial support from your local authority.
You may still have to contribute towards the cost of care though, as only those with capital is below £14,250 are entitled to maximum support.
The assessment is based on the financial details of the one receiving care and support and takes into account your income, savings, and the value of your property.
Also known as a ‘long term care annuity’ or ‘immediate care annuity’ as it is sometimes called, is a simple and tax-effective means of paying for elderly care in the home.
With these, you use a lump sum to buy an insurance policy that provides a regular lifetime income. This income is to help fund your care fees for as long as you live.
There are two options when it comes to care annuities. The main difference is whether you need:
- care funding now (immediate funding), or
- care funding in the future (deferred funding).
Further details – Paying For Care Buying a Care Annuity
Long Term Care Insurance
Long term care insurance is an insurance policy, offered by UK insurers, which provides the money if you should have to pay for care for either yourself or a loved one. Long term care insurance will typically cover the cost of assistance for those who need daily living or personal care, such as getting out of bed, dressing, washing and going to the toilet. In many cases this type of care insurance will also cover against costs for dementia care and Parkinson’s care.
Equity release allows you to access some of the value of your home while you carry on living there, and is one of the most common ways to pay for care, if you are a homeowner.
This is when you can access funds from the value of your home and can be used for anything, including funding care, typically either releasing a large, single payment to buy a care plan or releasing smaller sums as and when you need them.
To qualify you need to be a UK home owner aged 55 or older with a property worth at least £70,000.
Income from Investments
Using income from investments can help supplement your pension or other regular income to fund home care.
The first step is to arrange for your current assets to generate a steady income.
- government bonds
- shares, or
- unit and investment trusts.
While sound investments can pay out regular returns to help pay for your care fees, the returns can’t be predicted, so it’s prudent to contact a financial advisor to help you select suitable long term investments.
While some people may have enough built up enough savings to pay for care fees, many people combine their savings with other ways of funding care. There are many benefits of using savings to fund care as it’s readily accessible, low-risk, and no fees or charges are involved.
Any amount of savings can be used to pay for care, but you should always get specialist care fees advice to ensure your savings are used effectively and you don’t run out of money.
You can read more about how you can use your savings income here.
Paying for care using your pension and income drawdown can be a great option as long as you have other means to provide income or fund other costs. To consider this funding option, you should be over 55 years and have pension savings that are already in a drawdown or can be moved into a drawdown product.
NHS Continued Healthcare Funding
In certain circumstances the NHS can provide care funding, however, the eligibility requirements are quite complicated and are updated over time. Using NHS continued healthcare funding (CHC) is only possible if you have complex ongoing healthcare needs. Once an application has been made, an assessment will be required to determine if you qualify for this funding.
Further information on paying for care
More information can be found on our Funding & Planning page and the following sites offer further details and useful advice to help you understand the different ways to fund care in your own home.