How much does long-term care cost?
In later life, many of us will probably need long-term care in one form or another. It is a good idea to think ahead about your likely care requirements, so you know in advance what kinds of care are available, what these might cost, and whether you may be able to get some or all of your care paid for by the state or Local Authority.
Do I need care?
Step one is finding out whether you need care, and what form this care should take. If you start to struggle on a day-to-day basis, contact your Local Authority adult social services (either directly or via your GP) and they will arrange a care needs assessment. This will make recommendations based on your health, mobility and any other specialist needs.
What are my options for care?
Your care needs assessment may recommend a particular form of care for you. The main options are:
Care in your home
This might be anything from a couple of carer visits per week, to several hours every day. This takes care of basic needs (such as washing, dressing, taking medication, cooking).
A residential care home
A care home provides help with basic needs 24 hours a day, as you are a resident there.
A nursing home
A nursing home is a care home that also has qualified nurses on duty 24 hours a day, so can offer specialist medical care.
Will I get funding for my care?
Once your Local Authority is aware of your care needs, they will carry out a means test to see if you’re eligible for help with your care costs. The means test will look at all your assets, including your pension and any savings or investments. Usually it will also include the value of your home, unless you, your partner or a dependent will continue to live there. Bear this in mind when weighing up your options – for example, a means test for care in your own home will not include the value of your home, just your other assets.
As a rule of thumb, if your assets total less than £23,250 in England and Northern Ireland, £26,500 in Scotland or £30,000 in Wales, you should receive at least some funding for your care. Your Local Authority and/or financial adviser can tell you how much you’re entitled to. However, even if your means test finds that you must pay for your own care, you may still be able to claim some benefits regardless of your other assets. Use this benefits calculator to find out which you may be entitled to.
How will I receive my care funding?
You can choose to receive Local Authority help in either of two ways. You can ask the council to provide care services directly to you, or you can opt to receive payments from them to help you fund care yourself. These are called 'direct payments' and are means tested (see above) so may cover only part of the cost of your care.
If you are aged 65 or over, you are automatically entitled to attendance allowance if you need care. This is paid at two rates: £55.10 per week if you only need daytime care, or £82.30 per week if you also need care at night.
Remember that if you pay for a private carer in your own home (with or without Local Authority direct payments) you may become an employer, with associated responsibilities. On the other hand it can enable you to have more choice and control.
How much will my care cost?
The exact cost of your care will depend on various things, such as the type of care you receive, how many hours per week you need it, where in the UK you live, and your care provider. Here is a broad summary of the costs you can expect for different kinds of care.
Care in your own home
Care at home usually costs between £10 and £30 per hour, depending on the provider and when you need them (e.g. night times and weekends may be more expensive). The average hourly rate is around £15, so for three hours of care every day you could expect to pay just over £16,000 per year.
A residential care home
The average cost of a residential care home in the UK is around £32,0001 per year. However, this can vary significantly depending on where you live. Some care homes in the North West may charge as little as £27,000 while those in London and the South West can charge nearly £40,000.
A nursing home
Nursing homes are generally more expensive (£43,000 per year on average) but like care homes their fees vary by region. The cheapest may be found in the North East (around £35,000 per year) while the most costly are in the South East (over £54,000).
Which is better: care at home or residential care?
Should you move into a home or be cared for in your own home? There are lots of things to think about when making this choice. Here are some of the main issues to consider.
The means test: If you move out of your home and you have no partner or dependants living there, your home will be counted among your assets. Staying at home may make it more likely that you receive Local Authority funding.
How much care do you need? If you need more than 5 hours of care per day, the costs will approach those of a care home. It may therefore make financial sense to move into residential care (but bear in mind the means test – see above).
What will work best for you? Think about the practical pros and cons of being in your own home, versus being in residential care. If the financial and practical issues are finely balanced, it may come down to personal preference.
How do I choose the right care?
The first step is your care needs assessment, which will give a broad idea of your requirements. A good next step is to talk to a local financial adviser who specialises in long-term care. Such an adviser will have extensive experience of situations like your own, and should be familiar with the best options and providers available in your area, along with the costs and the best ways to meet them.
If you've found a care provider and want to check their credentials, you can look them up on the website of the regulator, the Care Quality Commission. If a provider does not have a good or outstanding rating then you may wish to consider alternatives.
How can I pay for my care?
The high cost of long-term care means it is important to plan for it in advance. Ideally you should have this conversation with a financial adviser at the point of your retirement, to give yourself maximum time to prepare.
However, even if you will need care very soon, a financial adviser can still be a great help. They will act in your best interests, advise you on suitable care, and help you arrange the best ways to pay for it. Find out more about how to pay for long-term care.
Be sure to choose a financial adviser with specialist qualifications and experience advising on long-term care. You can find one using the Unbiased search.
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1 Figures taken from Laing & Buisson Care of Older People UK Report 2016/17.