The future of care is changing, and there are more options than before when it comes to getting your care needs met as you age. However, no matter which type of care you’re looking for, there are usually costs associated with this.
There are, basically, four main options for you to meet the cost of 24/7 live in care in your own home. It may be that one of these ways is not suitable in isolation, and this is often the case, but you need to look at each of the options and consider which one or combination is the most suitable for you.
Using cash, savings or liquidating any assets you may have to meet the costs.
Look at any investments you currently have and ensure that they are set up to provide you with the best income. Whilst investing directly in the stock market is not generally advisable when you have care payments to meet, there are other lower risk, mainstream funds that may be advised more suitable and have a better chance of providing a higher return than would be achieved by leaving all of the capital in the bank.
Care fee annuity
Care fee annuities are relatively simple. Some of your capital is used to buy yourself an income, which you then use to pay for your care for the rest of your life. The care funding is then largely solved with the writing of just one cheque. You do need however to be fairly certain that you will get back in income the capital that you have used to buy the annuity. This is because the main downside of annuities is that the income stops on the death of the person who owns the annuity. Care funding annuity income is generally much higher than from an ordinary annuity, but the costs vary for each individual, so you will need to find out for your circumstances.
If you are a homeowner, you may have a reasonable sum of equity in your home. So, looking to release equity to fund care is a popular choice. You can downsize to release equity or borrow money from your bank and then pay interest on the loan.
There are also formal equity release schemes available. You don’t make any repayments during your lifetime, but the loan and interest are repayable on your death. Equity release is often considered alongside care fee annuities so that you do not need to continue to borrow more money.
Means tested care
Social care in the UK is means tested and in the 2019/20 the level is set at £23,250, so if you require care and have assets over this level you will be required to pay. For live in care your home is not generally considered as an asset, and some types of investment are also exempt. You may be entitled to certain state benefits such as Personal Independence Payments (PIP). The NHS through the Continuing Healthcare scheme may if you are particularly unwell give you full or partial help to meet fees.
You can find out more at the Live In Care Hub (www.liveincarehub.co.uk) by looking at their Care Funding Report to help you make this important decision.