Every year thousands of people move into a nursing or residential home, or enlist the help of a carer to support them at home. It’s often a difficult and emotional time, but it can also be a financially draining one.
Most of the time it’s younger relatives, such as grown-up children who are often in their 50s or 60s themselves, who have to sort out the arrangements. Making these kinds of important financial decisions can be tough, but it’s vital that you and/or your parents get expert advice to avoid making a costly mistake.
Here, we look at some of the things to consider when working out what sort of care is needed for your parents, and how to pay for this care.
1. Take your time
Many people aren’t receptive to the idea that they need care at all. A parent with dementia, for example, might be adamant that they can manage perfectly well on their own, even though you are doing everything for them. They may be particularly resistant to any sudden changes, so if you can gradually introduce the idea of care to them, it may make it easier to persuade them that it’s necessary.
Don’t feel you have to rush to make a decision about how your parent or relative pays for their care either. If they’ve had to sell their house, it’s not normally a good idea to simply put the money into a bank account and use that to pay care home fees as they may run out of money quicker than you think. Having said that, with so much going on it’s best not to rush into anything that you might regret later on.
2. Where will they be happiest?
When you’re looking for a care home or a carer to look after your parent in their home, it’s often a good idea to take money out of the equation in the initial stages, if you can. The most important thing is that your mum or dad is happy in the care home, or that you find a carer they get along with.
Do plenty of research and find a home that you think will suit them, or introduce them to a carer you think they will like, and then have a conversation with an advisor about how they might be able to afford it. You can find out more about the different options in our article Care home or live-in care – which is best for your loved ones?
3. How will they cover the cost of care?
Care homes are expensive and it’s silly to pretend otherwise. But the difference between an average and a really good care home may not be that much and, with a bit of financial planning, it could be affordable. Find out:
- How much does the care home cost? Costs vary widely depending on whereabouts in the UK the care home is and the level of care provided. According to Carehome.co.uk, the average weekly cost of residential care if you are a self-funder is £1,160, while the average nursing home cost if you are funding your own care is £1,410 per week across the UK.
- How much money does your parent already have? This could include both State and company pensions, benefits such as attendance allowance, property, or savings and investments.
- What is the difference and how do you fund any gap? You may decide that you don’t want to do anything more complicated than fund care fees through your parent’s savings, but you should only reach that decision once you’ve taken expert and independent advice.
You can find out more about covering the cost of care in our guide How to pay for long-term care.
4. Might they be eligible for financial support with care costs?
A parent who needs ongoing medical support may be able to get their care costs covered if they’re eligible for NHS Continuing Healthcare (CHC), although it can be a struggle to secure this funding.
NHS Continuing Healthcare covers costs for people who need the highest level of care at home, in a hospital, nursing home or hospice. Unlike care costs that are covered by the local authority, NHS Continuing Healthcare isn’t means-tested.
To receive NHS Continuing Healthcare, your parent must have ‘a complex medical condition with substantial, ongoing care needs’, and there’s a rigorous assessment process to apply for funding. In reality, many applications aren’t successful, but it’s definitely worth trying.
The NHS National Framework sets out the rules that must be followed when applying for NHS Continuing Healthcare. This is made up of 187 pages, which gives you some idea of how complex and difficult the process can be to secure funding. You may be able to get help from Beacon CHC, a charity that can guide people applying for NHS Continuing Healthcare. Find out more in our guide Can you get care fees covered with NHS Continuing Healthcare?
5. Could an immediate needs plan be suitable?
If your parent doesn’t qualify for help with care costs, one way to cover them, which may not be right for everyone but might be worth considering, is via an immediate care plan, or annuity. This guarantees to pay care home fees for as long as your parent lives.
With an immediate needs annuity, your parent essentially enters into a contract with an insurance company, where in return for handing over some, or all their pension savings, they’ll be paid a guaranteed income for life to pay for long-term care costs. The cost of an immediate care plan varies according to how old and how healthy they are when they buy it. A major benefit of immediate needs annuities is that unlike other types of annuity, income from an immediate needs annuity is tax-free. This is because payments made by an immediate needs annuity insurer are not considered as income, as they are paid directly to the care provider. Find out more about this type of plan and whether it might work for your parent in our guide What is an immediate needs annuity and how can it help pay for care costs?
Finally…
Working out how to fund long-term care can be complicated, so it’s worth either you, your parent or another relative seeking professional financial advice if they’re not sure how to proceed.
If you’re thinking about getting professional financial advice, you can find a local financial advisor on VouchedFor or Unbiased.
It may also be worth contacting the Society of Later Life Advisers, a not-for-profit organisation dedicated to improving accessibility to regulated financial advice for older people and their families.
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