Understanding your funding options can help to make paying for care a little less daunting.

Meeting the cost of residential and nursing care in old age is a growing issue for many people in the UK. As life expectancy continues to lengthen, more of us can expect to require some form of long-term care.

Whether you are a relative or someone who needs to plan for their own later years, the costs involved can be daunting, to say the least. The average cost of residential care in the UK is now estimated at £24,908 a year. If nursing is also required, this can rise to £34,788 a year.*

The Local Authority’s Position:

As you may well be aware, the provision of long-term care outside hospitals has become the responsibility of individual Local Authorities and it is not free to everyone.

Your Local Authority will assess your means to establish what proportion of the costs is your responsibility and what the Local Authority will pay. If you can expect a contribution from the Local Authority, the Authority will contract with the care home, pay the home direct but ask that you make your contribution towards the fees to them. The size of the contribution depends on the assessment of your wealth by a means test. Your Local Authority will use the national guidelines to take all your assets and income into account when they assess how much they will provide towards your care.

The subject of state funding of long-term care has been receiving increased political and media attention, but any significant changes will take years to implement.

How much of your Income will you be expected to pay?

If you are on your own then the Local Authority will expect you to contribute all of your income less the Personal Expense Allowance towards the cost of your care in a care home. If you have a partner then the Local Authority will expect you to contribute all of your State Pension and at least 50% of any Personal or Company pensions you may have. The other 50% may be disregarded providing it is paid to your partner in order that they can afford to continue to live at home.

Additionally, if you have capital/assets in excess of £23,250 (this limit applies to England. Wales; Scotland and Northern Ireland have their own limits), you will be expected to fully meet the costs of your care in a care home. This can be a tremendous drain on your assets over time.

There are affordable solutions to potentially reduce the impact long-term Care will have on your assets. Haven IFA Ltd can offer advice on all the key issues for anyone who needs to think about paying for long-term care whether for themselves or a loved one.

We know that going into care can be an emotional and difficult time. By showing that practical and affordable solutions are out there we can take some of the stress out of the process and help more people enjoy their later years.

*Laing and Buisson, Care of Elderly People, UK Market Survey, 2009