We know through 10 years’ experience in helping families to plan long term care and home care funding, 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.
Our live-in care costs are comparable with the cost of a care home. However, live-in care is a very cost effective option for couples. A couple that moves into a care home can typically expect to pay double the price for care, but with live-in care there is only a small additional charge. Whichever care option you choose, 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 funding options for families who need to self fund their care.
A care fees annuity
A care fees or immediate needs annuity is a type of insurance policy also known as a ‘care fees plan’. They care commonly used for self funded care. 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. If the income from an immediate needs annuity is paid directly to you or your loved one’s registered care provider, it is tax exempt under current HMRC policy. The annuity can also be index-linked in order to protect against the effects of fluctuating inflation.
The Good Care Group works in partnership with Symponia, a professional body representing over 120 financial and legal advisors who are all specialists in the area of privately funding care. They can help you with funding long-term care at home, so you can have peace of mind and reassurance that you are receiving the very best advice.
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.
If you are privately funding care, 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.
Immediate Care Plans (ICPs)
Immediate Care Plans (ICPs) are a tax-efficient way of covering all, or part, of your care costs. The plan will pay an agreed, tax-free amount at regular intervals, directly to the care provider, for as long as care is needed. Payments can be set to rise over time, to keep pace with any increases in cost. A lump sum is required to purchase the plan, with the calculation being based on your age and health.
Home reversion plans
With a home reversion plan, you agree to sell all, or a percentage of, your property for an agreed amount. You will come to an agreement with the revision company as to how that money will be paid, typically as a lump sum or monthly income, or both. You will continue to live in your home. When your home is eventually sold, the revision company will receive their proceeds from the sale.
The Moneyhelper website is another useful resource, which brings financial and pension information together from three government financial guidance providers; the Money Advice Service, the Pensions Advisory Service and Pension Wise. They provide information on care fees annuities and other forms of self-financing care.
The Care Fees Annuity website has a cost of care calculator that provides an estimate as to what premium you may need to pay, based on your circumstances.
Legal & General has a useful care costs calculator which will help you understand how much may be needed to self fund care.
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.
Expert advice from Symponia
To help them explore home care funding, they talked through the option of equity release with the local Symponia member, who suggested that the whole family became involved in the discussions. Symponia is an organisation dedicated to providing independent financial advice to families so they can finance their private care fees. A key decision was how much money should be released. Did the family just take enough for one year and continue to draw down each subsequent year, until the maximum sum had been exhausted?
Exploring an immediate care plan
To help the family get the peace of mind they desired, the advisor suggested they explored an Immediate Care Plan for self funded care. 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 Ericks care costs.
After assessing Eric’s health, the cost of the Immediate Care Plan for funding long term care at home, 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 long term care funding meant that Eric was able to receive the high-quality care at home he needed. They both also 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 exemptions 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.
Talk to us about your long-term care funding needs
We are experts in providing a fully managed, high-quality live-in care service rated ‘Outstanding’ in all areas by CQC.
Call our friendly and approachable care advisors today to arrange an assessment of your care needs. This will give you a better understanding of the cost of live-in care. We can then support you to explore what financing or funding is available to you and your family.