With an ageing population and more people over 65 needing 24-hour care the concern people have about funding the potential need for a care home is only becoming more relevant.
Care home fees can be expensive, and many fear that they may have to sell their property or drain their savings that they intended to pass on as inheritance. The need and want to look after yourself can feel overwhelming, and emotions can run high where you are concerned about sufficiently organising your finances.
In this article, Bridge McFarland’s experienced private client solicitors share some ways in which our elderly and vulnerable clients may plan their care home fees, whilst protecting their homes and assets.
How much will my care home cost?
In the UK, the average weekly cost of living in a residential care home is £760 and the average nursing home costs £960 per week. However, the actual fees paid are affected by:
– Where you live.
– The type of care required.
– The provider of the care service.
– How much savings and property you have.
The average cost of a residential care home in the UK is almost £40,000 per year, rising to £50,000 per year where nursing care is required. Therefore, many people fear they must be prepared to sell property or utilise savings.
How much do I have to contribute to the cost of my care?
Contrary to popular belief, many people do not have to foot the entire cost of their care.
Following a care needs assessment (an evaluation that determines the kind of care you require) carried out by your local council, you will be financially assessed (known as a ‘means test’). The financial assessment involves the council enquiring about your finances, income, and assets to calculate how much you will contribute to paying for your care.
– If you have assets worth more than £23,250, you must pay for your own care in a care home, according to the current system.
– Where a care needs assessment concludes that you should receive care in your own home, the £23,250 remains but this no longer includes the value of your home.
– If your assets are worth less than £23,250 but more than £14,250, you will be liable to pay a proportion of the costs based on a sliding scale.
– Finally, if the value of your assets totals below £14,250, your care and support needs will be paid for by the state, and you are not required to contribute.
Am I entitled to support for care home fees?
Several options are available to assist with the cost of care home fees. These include:
– Making a financial gift.
Although this could be beneficial, doing so should be approached with caution as if the local council has reason to believe you have intentionally reduced your assets to evade care home fee payments, you may fall foul of the deprivation of assets rules, meaning the value of the gifted assets may be considered in the assessment, even if you are no longer in possession of them.
– Rent out your home.
You will be able to utilise the revenue to fund the fees.
– Care annuity.
This is an insurance policy that pays a regular lifetime income towards your care fees. There are two main types:
o Immediate needs annuity where a lump sum is paid to buy the policy upfront to cover the care funding immediately.
o Deferred annuity where payments are delayed to the future. With this, the longer it is deferred, the lower the cost of the plan.
– Equity release.
To release equity on your property, it is essential to seek the appropriate legal advice. Releasing equity can be a great way to fund care fees and there are several options available.
– Asset Protection Trust (APT).
With an APT, you will no longer own your property but will retain rights over it. This is often known as a home protection trust or wealth preservation trust.
Solicitors to assist with Care Home Fee Planning
At Bridge McFarland, we have a team dedicated to supporting older clients with a variety of matters from care home fee planning to life interest trusts and cases of financial abuse.
Our solicitors have decades of combined experience in helping people to plan their finances to assist in covering the cost of care fees in an efficient manner, preserving finances for inheritance purposes where possible.
We have offices in Grimsby, Hull, Lincoln, Louth, Market Rasen and Scarborough and are more than happy to welcome clients to our offices to discuss matters with them. Where necessary, we can also visit you at home or in hospital to speak with you.
Please get in touch today on 0800 987 8800 or email enquiries@bmcf.co.uk.
