Financing long term care at home
We know through 10 years’ experience in helping families to plan long term care, that the majority of people wish to live an independent and active life in the comfort and familiarity of their own home and avoid the upheaval of moving into a care home. Our live-in care service provided by highly trained and expert professional carers makes this possible, right until the end of life.
The live-in care costs are comparable with the cost of a care home, and for live-in care for couples it is very cost effective. Whilst the fees for residential care and high quality live-in care at home are comparable, whichever you or your loved one chooses you may have to cover some, or all of the cost of care if you are unable to secure healthcare funding or social care funding.
Here we explain how those families that are self-funding their care can finance the cost of care over the longer term.
A care fees annuity
A care fees or immediate needs annuity is a type of insurance policy also known as a ‘care fees plan’. An individual will be assessed to understand their health and care needs now with a projected outcome for what is required in the future. Following an assessment, a fee is payable based on the outcome of the assessment with a view to covering weekly care fees, whether in a residential care home or through a live-in care service for as long as it is needed.
A care fees plan can be purchased as soon as the need for care provision arises and, as the name suggests, benefits the recipient immediately.
Equity release to finance care fees
Equity release schemes enable homeowners aged 55 years or older to release some or all of the accrued value of their property without the need for selling it or moving elsewhere.
This enables you to use the value of your house to pay for your care fees, or to purchase a Care Fees Annuity. This means that you therefore do not have to sell your house and can receive live-in care in your own home. How much you can release depends on several factors such as your age, health, lifestyle, the kind of equity release plan you choose and how much your home is worth.
Case study: Paying for Eric’s live-in care
Eric and Alma had been married for over 65 years. Sadly, Eric’s deteriorating health meant that a move into a care home seemed an inevitable end to their life together. Alma and the family wanted him to stay at home but knew that this would not be an easy decision, as Eric needed specialist personal care and Alma was unable to provide this. As a potential solution, the family considered having a live-in-carer and both arranged a meeting with The Good Care Group. Following our assessment, we knew we could deliver a live-in care package to meet their needs.
Exploring an Immediate Care Plan
To help the family get the peace of mind they desired, the advisor suggested they explore an Immediate Care Plan. They calculated the income Eric and Alma received, by way of pensions and other investments and compared that to their expenses, which had to take into account not only the household costs, which largely remained unchanged, but importantly Erics care costs.
After assessing Eric’s health, the cost of the Immediate Care Plan, with a built in automatic 5% inflation was £92,000. Eric and Alma then used equity release to buy the Care Plan. As their property was valued at over £500,000, the release of equity was just under 18.5% of the total value.
This meant that Eric was able to receive the high-quality care at home he needed and they both had the peace of mind that his needs would be provided for, for the remainder of his life. Much needed reassurance when they needed it.
Local authority support
Even if you are not eligible for any social care or healthcare funding, you may be entitled to other local authority support that contributes to funding the live-in care you need, including exemption or a discount on your council tax, attendance allowance and savings credit – all of which can reduce the cost of receiving care in your own home. Find out what local authority support could be available to you here.