What you need to know when funding long term care

Are you considering care options for you or a loved one? Here is what you need to know when funding long term care…

The first thing to say, is that we are not qualified to give you advice about specific care homes, you will need to do your own due diligence to choose the right one for your circumstances.

So, what do you need to consider?

Many people assume they will be able to access Government support to cover care costs, but it is very unlikely unless assets are below a certain threshold. In 2021, that threshold in England is £23,250, so will only be met if the person going into care does not own their own home or has very limited savings and investments.

The threshold does vary dependent on where you live in the UK. You can reach out to your local authority to ask them to do an assessment. They will tell you if you are entitled to any funding to cover or go towards care costs, and what you need to do to access that funding.

Sometimes, it is possible to access NHS funding to cover all or part of the care home costs. However, the criteria is very complex, and funding is usually only available for what is known as continued healthcare funding or CHC. You should contact your family GP in the first instance for guidance but be prepared for a lot of complicated forms and jumping through hoops to move this forward, if you are eligible.

The quality of care home available under Government/NHS funding may not be the right option for you or your loved one, so you do need to consider this when making your decision.

It is possible to top up the funding available from a local authority, but you cannot use funds directly from the person requiring care – it must be a relative, friend or loved one. This top up will enable you to potentially have more choice when it comes to choosing the right care home.

The average care home costs £1,500-£1,700 per week.

It is a huge amount of money, which comes a big surprise to most people.

Obviously, you want to ensure whoever is going into care is well looked after, and they are able to maintain a good quality of life for as long as possible.

To give you the widest options in terms of your choices, we recommend planning for care fees as soon as you are able to do so.

That planning comes in various shapes.  You should certainly be looking to safeguard assets, so you are not forced to sell the family home to cover care costs. Equally, you should be protecting pension funds, so this is not entirely consumed by care costs. Setting up Trusts to protect the estate is one of the most secure ways of handling this.

You could consider an annuity that would pay out in the event of care. It is also possible to purchase long term care insurance to cover care costs, but you will need to do this before knowing care is required. Typically care insurance pays out if the person needing care has a medical condition, such as dementia or Parkinson’s Disease.

You do also need to consider other costs that will be incurred.

Clothes, toiletries, treats and so on, will be in addition to the care home costs. Those costs would not be covered by any funding support. So, before making decisions, you will need to factor in all of the costs.

If you would like advice on protecting your assets or setting up funding to insure against the costs of long term care, please contact us on 01344 875 310.

funding long term care