Often we find ourselves suddenly needing care for a loved one. It can be overwhelming as there are so many things to think about and organise and we need support right away. One of the main questions we have is “how will we pay for it?”. We have a separate article that answers the question “is there government funding available for care”. Here we discuss how we might pay for care privately.
Firstly, it helps to keep it mind that care needs may change over time, and often the amount of care we need increases. At the moment Mum might need a bit of help in the mornings and evenings, but it might be that soon she will need more help throughout the day.
Personal Financial Resources
If we are self-funding care, then it helps to know what are the financial resources we have available. These are usually one of the following:
Savings and liquid assets – bank accounts, ISAs, stocks and shares.
Property – either private or owned through a business
Income – such as pensions, annuities, dividends, state benefits
It may be that there are sufficient available funds to adequately pay for care. Or it may be that income and savings are not enough and that another option might be needed.
Often we need to use the value of our property in some way to help pay for care. There a few ways in which to do this.
Equity release – a way to turn the full or partial value of our property into a cash lump sum
Downsizing, selling or renting out our home – for live-in or hourly care, downsizing can often provide funds to pay for care at home for many years.
Deferred payment scheme – this is effectively a loan from the local authorities where the council pays for the cost of a care home, and the costs are repaid at a later date when we sell our home.
Long Term Care Insurance (LTCI)
One way to insure against the costs of care in later life is to have long-term care insurance. This comes in two categories:
pre-funded – Insurance in case care is needed in the future
point of need – Insurance paid once care is needed.
Due to the current high life expectancy and costs of care, there aren’t really any policies that will pay for the full cost of care. It’s usually a lump sum towards care or if someone loses the capacity to make decisions for themselves.
Often our situation can be somewhat complex, in which case it can be helpful to have the support of a financial advisor. You can find a register on financial advisors on the FCA website.
The Society of Later Life Advisers (SOLLA) are a non-profit company who are able to offer financial advice to people in later life.
How we can help
Careleaf is a live-in care introduction agency who can help your loved one live happily and independently at home. Do explore our website, call us on 01273 900262 or send an email to firstname.lastname@example.org for more information.