Long-term care

Long-term care involves a range of services (both medical and non-medical) that you might need if you cannot care for yourself for long periods of time, whether due to disability, illness or just old age. You may need long-term care at any stage of life, though it is most commonly required by elderly people.

Sometimes long-term care is fully or partly funded by the NHS. Otherwise it may be provided by your local authority, but depending on your financial circumstances you may be required to pay for some or all of the care you receive. Equally, you may want to top up any funding you do receive in order to receive a better standard of care. Paying for long-term care is therefore a major part of later life financial planning, for which a specialist financial adviser can be invaluable.

Finding the money for long-term care

You may be wondering how to fund your own long-term care, or you may be using Power of Attorney to fund care for a relative on their behalf. Either way, there are several possible options. (‘You’ below always refers to the person who will receive the care.)

  • Releasing money from your home
    You could downsize, moving into a cheaper property, or rent out part or all of your home. Another way to free up money is with an equity release scheme, which will enable you to carry on living there. Alternatively you could set up a deferred payment agreement, in which your local authority will take payment at a later date from the proceeds of your house when it is sold.
  • An immediate need care fee payment plan
    Similar to an annuity, this gives you a guaranteed income for life, in exchange for a lump sum. This can be a good solution if you’re likely to need care for several years or more with little prospect of improvement, but may not be good value for those nearer the end of life.
  • Other assets
    Money from savings, investments and your pension pot could all be sources of long-term care funding. The difficult part is using these resources wisely and efficiently so that they don’t run out too soon.

Creating the right funding strategy

How do you decide which of these options will work best for you? A specialist financial adviser can find you the most effective solution.

You will probably need a specialist care fees adviser – check to see that they have the CF8 and/or CeLTCI qualification. Your adviser will sit down with you to assess your current finances, your overall circumstances, the potential costs of care and the most practical solutions to consider. He or she can then source appropriate products for you from the whole of the market.

You can find your nearest specialist care fees adviser using our financial adviser search. Enter your postcode, then when the longlist appears, click the Long-term Care filter on the left-hand side to see a shortlist of advisers who offer this service.

Some questions to ask your financial adviser:

  • What are my best options for funding long-term care?
  • Am I entitled to any help from the NHS or local authority?
  • Can I fund my care while still ensuring there is money for my children to inherit?
  • Should I use the value of my house to help fund my care, and how should I do this?