How to Pay for 24/7 Live-in Care
Finding the best care solution for a loved one who needs support is the number one concern for most families, but close behind is how to pay for it.
In the past, care homes were the only real solution for 24/7 care. However, innovative and flexible alternatives such as Elder live-in care have now emerged, which not only allow your loved one to stay in their own home and receive one-to-one support, but can also be up to a third less expensive than traditional options.
Opting for live-in care can help reduce costs, but whatever option you choose for your relative, it’s vital not to underestimate the ongoing financial impact, which can be significant over time.
The impact of a care decision can be far-reaching, and the first thing that most people find is that the financial support available from Local Authorities is limited. Therefore, the full responsibility of meeting costs may fall solely on family members, and while this may be difficult for hourly care, it can feel prohibitive when it comes to 24/7 care.
If your relative’s assets (property, savings and investments) amount to less than £23,500, then a free Local Authority assessment will determine if and how much financial help they may be able to access – although they will have little say over the type of care arranged.
In any other situation, most people either use a property to provide capital or look to savings and investments. Property options have traditionally meant selling a person’s house to pay for care, but with 97% of older people in the UK saying that they’d rather stay in their own home, this isn’t an ideal solution.
Other financial solutions include equity release, or a ‘lifetime mortgage’, allowing 55+ homeowners to release money from their house while still living there. Conditions apply though, such as a minimum house value and loan amount, usually £10,000. A lifetime mortgage gives your loved one tax-free equity, and the mortgage is repayable when the house is sold.
A variant of equity release is a home reversion plan, which involves selling part or all of their home to a home reversion company, in return for a tax-free lump sum (or regular, index-linked, income). Your loved one can still live in their property as a tenant, but when care is no longer needed, house ownership reverts to the company.
Of course, your relative may have bonds or savings set aside for the possibility of needing care one day, but even then you may find that the money saved falls short of what’s needed. Changes in a medical condition or longevity that extends the need for care, sometimes for decades, can scupper the most well-planned care budget.
Boosting savings with investment options may be a good idea, using products such as an Immediate Care Annuity to swap an upfront lump sum investment with an insurance company in return for a guaranteed income for life.
In all cases, it can be helpful and prudent to take expert advice before making a decision, which is where Elder can help.
Elder’s senior care advisors are experienced in guiding those considering care through funding options – both private and council. Simply call 033 0134 7627, and they will be happy to discuss options with you to ensure any funding plan for care is suitable and affordable for you and your loved one.
