We all like to think we’ll be taken care of when we get older. But most of us also realise the state may not pay for all of our long-term care needs.
So, how much of it will the state pay for? Are you eligible for local authority or National Health Service (NHS)-funded care? And would you need to sell your home? It can all seem a bit overwhelming.
The good news is, we’re here to guide you through care costs step by step. Let’s start at the beginning, by looking at local authority funding.
Will my local council pay for care?
The first question you’ll probably be asking yourself is whether your local authority or the National Health Service (NHS) will pay for care.
Who will pay, and whether you are eligible depends on a range of factors including your health, your personal care needs and the level of your assets.
If the reason you need care services is because of your health, your GP, health worker or local authority should refer you to the NHS for an assessment. If you meet the criteria, the NHS will arrange and pay for your care home placement under NHS Continuing Healthcare (NHS CHC).
NHS-funded nursing care payments
If you don’t qualify for NHS Continuing Healthcare, you may be eligible to receive NHS-funded nursing care payments. These payments are a tax-free, non-means-tested benefit designed to cover your nursing or medical care while you are living in a residential care home.
Local council-funded care
To find out whether your local authority will pay for your care, the first step is to ask them for a free needs assessment. This will establish what level of care you need. They will also carry out a financial assessment – often called a ‘means test’ – to calculate your income and whether you qualify for financial help for your care and support.
When you speak to your local authority, ask them about a Personal Expenses Allowance. They should also be able to explain what’s involved in your Care Needs Assessment and whether there is anything you need to do to prepare for it.
Personal Expenses Allowance (PEA)
Whatever you are required to pay towards your care, your local authority must allow you to have a Personal Expenses Allowance of at least £24.90 a week. This is for your own personal use.
What is a Care Needs Assessment?
A Care Needs Assessment is provided by the Social Services department of your local council. An occupational nurse or occupational therapist will assess your ability to manage carrying out simple, everyday tasks. They may also talk to your GP and/or nurse. Alternatively, you may be offered an online or telephone assessment, but you can ask for a face-to-face assessment if you prefer.
Will the level of my finances affect how much I’ll pay?
If you live in England or Northern Ireland and have less than £23,250in savings and assets your local authority will usually pay some or all of your care home costs. Different levels of eligibility criteria apply in other parts of the UK.
Care home support levels by region
£14,250 - £23,250
£14,250 or less
£14,250 - £23,250
£14,250 or less
£18,000 - £28,500
£18,000 or less
£50,000 or less
(The £ is the total number of savings of the person in question)
Source: Age UK ‘Weekly Residential Care Costs infographic 2016/2017'
Does the value of my home make a difference?
Unless your partner, a family member or child under 18 is still living there, your property is normally included in the means test. The test will use your home’s present market value, then deduct any outstanding mortgage or loan debt on the property, and will also deduct a further 10% of its value to cover any expenses that might be incurred in order to sell it.
Deprivation of assets – what if I give money away?
If your local council believes you have deliberately reduced your assets, for example by selling them or giving them away, they may still calculate your fees as if you still owned the assets. This could still be the case if, for example, you have a medical condition that you realise might require long-term care at some point in the future and begin to give away your assets years in advance. Even in this situation, it could still be regarded as deliberate deprivation.
What if my money runs out while I am in a care home?
If you are self-funding your care and your capital falls below £23,250 you should ask your local authority for an assessment a few months in advance of it happening.
Learn more about the costs of long-term care to see what option might be right for your situation.
The information on this page was sourced between June - October 2020 and updated in April 2020. Information on this site does not constitute any form of advice, representation, or arrangement by us and you take full responsibility for making (or refraining from making) any specific investment or other decisions. You should take independent financial advice from an adviser who is registered by the Financial Conduct Authority.
At Yorkshire Building Society we created Our Money Movement because we could see how most of the information for people approaching retirement was overly complex and full of jargon and hidden charges. Our aim is simple. To provide plain, straight talking guidance to help you make informed decisions about your financial future.