People are living longer than ever before. Thanks largely to medical science, research and people generally taking better care of their own health, it is believed that by 2041, the world’s population will reflect up to one quarter elderly individuals.
That is truly excellent news because we all want to keep our parents around as long as possible, but when you have an ageing parent, certain questions require an answer.
Why do you need long-term care planning?
How much can I have in the bank before I have to pay for care?
Can I get funding for long-term care?
Is 24 hour live in care more expensive than a residential care home?
What are the best ways to fund long-term care?
Conversations about future care: A vulnerable issue
There are around 7 million people aged 65 and over who have never had a conversation with family about future care and housing needs. According to a report from leading UK charity Independent Age , a huge number of families and individuals are in a state of uncertainty and have never explicitly discussed how they will manage if relatives need care and support.
• 63% of 65-74 year olds and 53% of over 75s have not had a discussion about who will care for them when they are older if they need it.
• 63% of 65-74 year olds and 59% of over 75s have not had a discussion about their preferences for end of life care.
A study in 2015 found that 85% of older people (aged 51 to 75-years-old) had no financial plans in place for their own care. This worrying statistic suggests that lots of us aren’t ready to think about our most important needs until it is too late.
Why do you need long-term care planning?
Our NHS is different to every other medical funding body in the world. The care and support services that are offered in England are not free, despite popular belief. A large percentage of people have to pay something towards their care, even if it’s just their medication, and some individuals even completely self-fund their medical and care needs.
The cost of your care and support will likely be a long-term financial drain. You’ll need to consider if you can afford your care. If you can’t, you need several financial options. Of course, things like loans and overdrafts are possible but they might not cover the full amount of your medical costs, and you may end up putting yourself in debt that you can’t clear later on.
Care is expensive, but you should understand the costs so you can budget. It is so important to do your research to ensure you make the right choices. With the right care plan in place you’ll have the fulfilling life you expect with the peace of mind that the financial side is taken care of.
Shockingly, “low expectations and pressure to make decisions quickly means people often accept the first home that is ‘good enough’.” The Live-in Care Hub recommends long-term care planning to avoid the ‘good enough’ decision and achieve the ‘perfect for me’ scenario.
The majority of people don’t plan for their later life care so when illness or disability strikes an elderly relative their families often don’t know who to turn to for help and reliable information about care choices.
They find themselves in a crisis situation without the knowledge to make an informed decision. This can result in a rushed decision and the assumption that a residential or nursing home is the only viable choice.
As early as possible, it pays to seek independent financial advice from an expert who is qualified to discuss later life care with you.
Lasting Power of Attorney: It’s not just about money.
You should also ensure there’s a power of attorney in place – preferably as soon as you start your long-term financial care planning. Putting in place a Power of Attorney is something that most of us don’t usually consider until an urgent situation arises. Sadly, that can mean that not all parties have complete understanding of how it works and how important it is. Instead, why not consider a Lasting Power Of Attorney (LPA) before you need to use it, so that everyone involved has made a completely informed decision. To help you get started, here’s some information about how they work, particularly beyond just the financial side of things.
Have I got enough money to look after myself in later life?
This is a big question that everyone needs to consider at some point in their lives, and now is a good time to reflect. 7th to 11th November is designated Talk Money Week – the ideal opportunity to be honest and open with family and friends about money. Typically, we all find it awkward and difficult to face this subject, but now more than ever, in these uncertain economic times with prices for essential day to day living items increasing almost on a daily basis, it is so important to be honest about how much cash you need to continue to live comfortably.
Can I get funding for long-term care?
It’s rare that there isn’t any funding at all available for individuals who find themselves in need of care, whether that be home care, or care in a residential care home. Care typically refers to several things, depending on the individual’s needs and recovery or living plan, which means that it’s difficult to confirm exactly what the individual can get without any information.
The current funding system means that in almost all cases, homeowners have to pay all of their fees if they go into a residential care home, because anyone with assets of more than £23,250 does not qualify for funding help. But for those staying in their own home, the value of the property is excluded from the means-testing process, so they can qualify for funding if their non-property assets are not above this threshold.
If you’re unsure on whether you’d qualify for funding for your care, get in touch and we’ll be happy to discuss this with you.
How much savings can I have before paying for care?
If you have income, capital and savings between £14,250 and £23,250, you will likely have to contribute towards the cost of your care. You may need to contribute part of your income. You will have to pay £1 for each £250 if you have capital and savings above £14,250. If your capital and savings amount to more than £23,250 you will have to pay the total cost of care yourself.
Do I have to sell my house to pay for care?
When facing later life many assume they will need to sell their home and move into a residential care home if family is no longer living nearby or is not an option to live with. However, this may not be the case. Live-in home care is a good and preferable alternative to residential care and far more accessible than many understand.
Many people seeking care for themselves or family members can easily become overwhelmed with the financing options available including those from the State. While your home is counted towards your capital assets, you don’t always have to sell your home to receive care. Read on to learn about the exceptions.
What is a lifetime mortgage?
With a lifetime mortgage, unlike other forms of equity release, you can release tax-free cash from your home whilst retaining full ownership of your home, and without having to commit to making monthly repayments.
Lifetime mortgage eligibility can vary but applicants must be homeowners and must usually be a minimum of 55 or 60 years’ old.
By releasing equity, you could use your lump sum to cover the costs of your live-in care. Equity release with a Lifetime Mortgage can offer a viable funding option for those who are considering how best to fund their live-in care.
Is a live-in carer cheaper than a care home?
Despite a common misconception that live-in care is much more expensive compared to moving in to a residential care home, in many instances it is an affordable alternative and can even be less expensive when a couple is being cared for at home.
Research conducted in 2021 by the live-in care hub confirms that the cost of live-in care is on a par with many care and nursing home fees, especially in the South East and London, and is broadly equivalent to the price of the top half of care homes in the south of England.
With live-in care, the level of care is completely tailored to the needs of the client because the care is 1-to-1. Carers working in live-in care are able to completely excel in their duties, offering the kind of care they were trained to provide.
The cost of care is a major factor when you are considering what care options are best suited to your needs. For live in care we advise that you speak to one of our team to discuss exactly what type of service you need. We can then provide you with an immediate quote for the cost of care.
Live in care fees cover the cost of a fully managed service, the cost of the dedicated carer, the management of your care and a care manager who will make sure you are happy every step of the way.
Demand for live-in carers is on the rise.
Live-in care is an increasingly popular alternative to residential care, as it allows your loved one to keep control of their life.
We know the default care option tends to be residential or nursing homes, although unsurprisingly 97 per cent of people don’t want to move into institutional care if they become ill or less able to cope.
“I expect live-in care to continue to grow in popularity and to become the high quality first care choice of many people” Dr. Glen Mason, Director of People, Communities and Local Government, Department of Health.
Live in care means a client never need to conform to a new daily routine in a strange new place. Instead, the flexibility of live in care means it is the job of the carer to adapt to the routine already in place. By living with your loved one they become completely dedicated to their needs, their wellbeing and their happiness.
We understand that many people have the intention to remain in their homes for as long as possible, and we make this a viable option for many. Quite simply, live-in care allows our clients to remain independent, in their own home, with all the security of professional help close at hand.
Helping individuals to make informed choices
Every year thousands of families run out of money when paying for care. Our job is to do everything we can to stop that happening. Mainly that means making sure people are well informed and make good decisions.
Understanding how to fund your care can be difﬁcult and feel overwhelming. We know, it can be hard to make that first phone call to us, but there really is no obligation, and we are more than happy to talk through the different options with you so you can make an informed decision.
Planning ahead and knowing what your care options are can help you to make informed decisions and help you to be more prepared. This will prevent decisions being made in a crisis that may not then be right for you.
It’s true that you can change arrangements if they prove to be unsatisfactory, but it is arguably better – and much less disruptive– if you get it right the first time. The good news is that by conducting some research and investing a little time in talking to us, you can give yourself – and your parent – the best chance of making the right choice.
Additional sources of information
Age UK – Paying for Care: https://www.ageuk.org.uk/information-advice/care/paying-for-care/
The Money Advice Service – Paying for Care: https://www.moneyadviceservice.org.uk/en/categories/paying-for-care
Society of Later Life Advisers: https://societyoflaterlifeadvisers.co.uk
Which? – Financing Care: https://www.which.co.uk/later-life-care/financing-care
Responsible Equity Release: https://www.responsibleequityrelease.co.uk
Care Advice Buckinghamshire: https://careadvice.buckinghamshire.gov.uk/paying-for-care/financial-assessments/
As a regulated care provider, we are accredited by the Care Quality Commission (CQC). We are also a member of the HomeCare Association and our mission is to create the right conditions for our clients to live independently in their own homes. This means consistent, compassionate, skilled, and knowledgeable care by staff who pay attention to the little things that matter most to the people they care for.