Cost of care

Options for paying for care at home

The good news is that when it comes to funding care at home, there are several options. While not all of these may be available or appropriate, it’s worth knowing what steps are involved as some of these can take time. The first steps are:

1. Local authority Care Needs Assessment

Before you can do anything else, your local authority and a social worker (possibly someone you have already been in touch with) will carry out a Care Needs Assessment. During this assessment they identify what the care needs are, and ensure that these needs can be met in the home.

2. Local authority financial assessment

Once your local authority has decided that care is needed, and that it's possible to provide that care at home, they’ll have a look at the finances of the person who needs care (looking at any income, savings, investments or other property that they may have), to see what help they're entitled to.

This will have two possible outcomes:

Financial support

If the person needing care has combined savings, assets and income below the Government threshold they may be entitled to some help towards the costs of care. How much this will be depends on their personal circumstances.

In this case, the local authority may offer to make direct payments to the care provider to help pay for care in the home. These payments may not cover the full costs of the care though, so it’s important to also consider other options.

No financial support

If the person needing care has combined savings, assets and income above the threshold, it’s unlikely that the person will be entitled to any help towards the costs of care. However, the local authority may offer to help pay for some equipment that is needed to continue to help them live safely at home.

Other ways to cover the costs of care at home

There are a number of options that you can consider:

Covering the care costs from income sources

This could include:

  • pension(s)
  • any benefits the person is already entitled to such as attendance allowance
  • capital from any investments or savings.

And it’s worth bearing in mind, that once the savings fall below the threshold set by the Government, they may be entitled to further support. The local authority will need to do another financial assessment to work out whether this is the case. You should let them know well in advance so you can plan how future care costs are going to be met.

Covering the cost gap with a care funding plan

A care funding plan, also known as an immediate needs annuity, works by providing a guaranteed income for life to cover the costs of care. This will pay the care provider until the person needing care dies. These payments are tax-free if paid directly to a registered care provider. To find out more about this option you should seek the advice of a fully qualified financial adviser.

Using the home to help pay for care

There are several ways that the person needing care can use their own home to help fund care. These options include:

  • Letting out a room / taking in a lodger
    Letting out a room can be one way to get some extra income and many people really enjoy the extra company that this brings.
  • Releasing equity from the home
    Equity release can be a way to unlock some of the value tied up in the home as a tax-free lump sum or regular payment which can then be used to pay for the care needed. To find out more about this option we suggest that you ask advice from a fully qualified financial adviser.
  • Downsizing
    Sometimes finding a smaller, more accessible property can be a good solution and raise extra cash in the process.
  • More information on the options and ways to pay for care can be found on the Money Advice Service website. We also strongly recommend getting specialist advice from a qualified and experienced adviser if you are paying for your own care costs.

    You can find out more about using equity release to fund care at home with the HUB Financial Solutions Equity Release Advice Service