How to fund your long-term care costs
long term care fees retirement home.jpg

With care costs spiralling, Yours money editor Sarah Jagger explains what the rules are, what you may be entitled to and how to protect yourself and your loved ones.

How much are care costs?

Residential care homes can cost anything from £200 to £1,500 a week. Even if you go down the care-at-home route, you'll find that at around £17 an hour, two hours of daily care could amount to £12,500 a year.

How to pay care home fees

Will my family have to pay for my care?

The situation is different depending on where you live and how you came to need care. Costs are split into care costs and accommodation costs. Sometimes the first 12 weeks of care and accommodation are free. After this, your assets are taken into account - including your home, unless a partner or dependent lives there. In England and Northern Ireland the figure is £23,250, Scotland £26,500 and Wales £30,000.

 Get advice before giving away assets

Get advice before giving away assets

Can I give away assets to avoid paying for care?

Some people give away assets to avoid paying for care but be aware the local authority could still make you pay under the Deliberate Deprivation of Assets rule. Before you make any decisions, seek advice from an independent financial adviser. Find one at Unbiased.

How to find a good financial adviser

What financial help is available?

It's not possible to pre-insure against long-term care, so it makes sense to save for a contingency fund and invest using ISAs and pensions to be able to help meet costs.

Even if you have to pay for care you may still be entitled to claim benefits such as Attendance Allowance (people over 65) and Personal Independence Payment (for people age 16-64, replacing Disability Living Allowance) if your health needs are great enough. You may also be able to claim a Council Tax discount. Visit Turn2us to see what's available.

How to challenge your council tax bill

The only bespoke financial product available is an immediate-care annuity sold by companies including Just and Aviva. This provides high levels of income based on your life expectancy. They can be good value if you live longer than expected as they reduce the impact of care costs on your estate.

What are the Government's future care plans?

  • The much-publicised ‘dementia tax’ was badly communicated and has now been dropped
  • Reform is needed to the adult social care system because we’re living longer, care costs are rocketing and there isn’t enough money within the NHS or tax system to pay for it all
  • We are likely to end up in a situation where we’ll be expected to pay more for our care with a higher means- tested limit and a cap on total care costs.

How to find a top carer