Paying for Care

If on the otherhand, you fail to qualify for NHS Continuing Care and need care in a care home, the responsibility for providing your care rest with the local authority and they are compelled to do a financial means test to see if you need to paying for your own care.

Paying for your own care

If you need to be self funding, there are a variety of ways in which care fees can be met, the main ones being:

A Deferred Payments Scheme:

If your total assessable capital (including property) exceed the upper capital threshold £23,500 England, £22,750 Scotland, £22,000 Wales (2010/11), providing your other (non property) assets are less than £23,250 England, £14,000 Scotland, £22,000 Wales (2010/11), rather being forced into selling your property immediately, you can apply to your local authority to pay the care costs for you until either you decide to sell it or die. In return you allow the Local Authority to place a legal charge on your property to ensure they can recover the money owed once the property is sold. If your application is accepted your Local Authority are only obliged to allow you “defer” the difference between your income and the maximum published contractual rate your local authority is willing to pay for the type of care you need. If you choose a more expensive home, then your family would still be liable to pay any difference.

Purchasing A Care Fees Annuity:

In return for paying a one off single premium to a specialist long term care insurance company, an immediate care fees annuity allows you to transfer the worry of paying for an unknown period of care to the insurance company who guarantees to provide the insured regular income "annuity" indefinitely to your care provider to meet your care fees. This can help you cap the cost of care at the outset and protect any remaining money for future personal use or inheritances. To ensure as much money as possible is left, we normally suggest that they are set up to provide only the shortfall between your care fees and ongoing income.

To request a personalised quote click care fees annuity

To consider the advantages and disadvantages of a care fees annuity click here.

Investing to provide income: This approach normally involves selling any property and investing the proceeds, in an attempt to provide the required income to meet the shortfall. Depending on your attitude to risk this can either be by depositing the money in deposit accounts or by investing the money in a diversified portfolio of different assets in an attempt to provide a higher return. Whilst this method might preserve the largest amount of money, should you die early, neither way provides any guarantee that the money will continue to meet increasing care fees should your need care for care continue.

Renting any property to provide income: Instead of having to sell your property to pay for care, should your shortfall be quite small, you might prefer to rent it out and use the income to pay for your care fees. However, any income produced may not be sufficient and could stop if the property remains unoccupied at anytime or the tenant stops paying. This approach also involves the responsibility of being a landlord and maintaining the property.
Which method is right and could leave you with the most money will depend on many factors including; life expectancy; the cost of an annuity; how much money you have and your attitude to risk. This is where professional care fees advice becomes invaluable as once we have obtained the exact cost of annuity option we will be able to compare it with the others methods and with the aid of our sophisticated computer model, analyse how much money each might leave.
To request an appointment with a care fees specialist click here.