Will I have to sell my house to pay for care home fees?

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Will the Local Council Pay for My Care Home Fees? Understanding the Landscape

There is currently no cap on care home fees in the UK. The UK government has announced that from October 2025 (this was originally due to come into effect in 2023 but has been delayed), no one in England will have to pay more than £86,000 in care costs during their lifetime. This article is based on the current rules.

When the need for residential care arises, one of the primary concerns is often how to fund it. This guide aims to demystify the process and answer some common questions related to care home fees.

1. What are the Typical Costs Associated with Care Homes?

Care home costs vary widely depending on factors such as location, level of care required, and the facilities provided. As of 2023, the average cost for a care home in England is around £800 per week (source: AgeUK). However, it’s essential to note that these figures can change, so it’s crucial to stay informed about the latest cost estimates.

2. How Does the Local Council Assess My Care Needs?

Before delving into financial aspects, your local council will conduct a care needs assessment. This evaluation considers various factors, including health conditions, mobility, and daily living requirements. It aims to determine the level of care you need, influencing the subsequent funding decisions.

3. What is Means Testing, and How Does It Determine Financial Eligibility?

Means testing is a crucial step in assessing your eligibility for local authority funding. This process evaluates your financial situation, including income, savings, and assets.

Example:

Suppose you have a monthly income of £1,500 and savings of £30,000. The local council would consider these figures when determining your contribution to care costs.

4. How Does the Local Council Contribute to Care Home Placements?

Local authorities may contribute to care home fees if you meet their criteria.

Example:

  • Monthly care home fees: £2,500
  • Local council contribution: £1,500
  • Resident’s responsibility: £1,000

5. What is the capital threshold for Receiving Local Authority Funding?

As of 2023, the capital threshold for receiving 100% local authority funding in England is assets lower than £14,250.

The value of your property may be included as capital in means test. However, in certain circumstances, the council cannot include your property in the means test. This includes if you have a qualifying dependent living with you (normally your husband or wife).

Here’s how the means test for social care will look at your capital and how this will affect how much you pay for your care.

Your capitalWhat you will have to pay 
Over £23,250You must pay full fees (known as being self-funding).
Between £14,250 and £23,250You contribute from income included in the means test, such as pensions, plus an assumed, or ‘tariff’ income based on your capital between £14,250 and £23,250. The council pay the remaining cost of your care.
Less than £14,250You no longer pay a ‘tariff’ income based on your capital, but you must continue paying from income included in the means test. The council pay the remaining cost of your care.

6. When Might Top-Up Fees and Family Contributions Be Applicable?

In some cases, the local council’s contribution might not cover the full cost of your chosen care home. This is where top-up fees come into play.

Example:

  • Care home fees: £2,800
  • Local authority contribution: £2,000
  • Top-up fee: £800

7. Are There Other Funding Options, such as NHS Funding or Personal Savings?

If your needs are primarily health-based, the NHS arrange and pay for your care under NHS continuing healthcare (NHS CHC). If you are eligible for NHS CHC, your care home placement will be free. When assessing your needs, the council must refer you to the NHS if it appears you may be eligible for NHS CHC.

If you do not meet the criteria for NHS CHC, but require nursing care, the NHS pays a contribution towards the cost of the nursing care directly to the nursing home. This is called NHS-funded nursing care (NHS FNC).

If you have personal savings or investments, you can use these to pay for or contribute to your care fees. Some providers offer bespoke products, like an ‘immediate needs annuity’ specifically designed to efficiently pay care fees. You should speak to a qualified independent financial adviser about these.

8. Why is It Important to Seek Professional Advice for Care Home Funding?

Navigating the complex landscape of care home funding involves intricate financial considerations. Seeking professional advice can provide invaluable insights and help you make informed decisions tailored to your unique circumstances.

Why Consultation Matters:

  1. Understanding Local Authority Criteria:
    • Professionals can guide you through the specific criteria your local authority uses for means testing and financial assessments. This clarity ensures accurate preparation and enhances your chances of securing funding.
  2. Optimising Financial Planning:
    • Financial advisors possess the expertise to optimise your financial situation. They can explore options to structure your income, savings, and assets strategically, aiming for the most favorable outcome during means testing.
  3. Exploring Additional Funding Sources:
    • Beyond local authority funding, advisors can illuminate other potential funding streams, such as NHS Continuing Healthcare or charitable grants. Their insights broaden your financial options.
  4. Mitigating Top-Up Fee Risks:
    • Advisors can help you understand the implications of top-up fees and assess whether they might apply in your case. Clear foresight into potential top-up fees prevents surprises down the road.
  5. Long-Term Financial Planning:
    • Care home funding is not a one-time decision; it’s part of your broader financial plan. Professionals can assist in long-term financial planning, ensuring your resources are sustainably managed to meet evolving care needs.
  6. Legal and Regulatory Compliance:
    • Care home funding involves compliance with various legal and regulatory requirements. Professionals can guide you through these complexities, ensuring your financial decisions align with existing laws and regulations.
  7. Emotional Support and Understanding:
    • The emotional aspects of transitioning to a care home are significant. Financial advisors can provide empathetic support, understanding the emotional toll of these decisions while helping you maintain financial stability.
    • Crafting Your Care Home Financial StrategyNavigating the complexities of care home costs requires a strategic approach. Assess your financial landscape, understanding how local authorities evaluate means, especially considering the impact of property ownership. Incorporate care home funding into your broader financial plan, ensuring compliance with legal requirements. Explore diverse funding avenues, and don’t overlook the emotional and social aspects of this transition. Develop contingency plans and, most importantly, seek professional guidance for a comprehensive strategy tailored to your unique circumstances.Ready to embark on this journey with confidence? Our expert financial advisers at Mather & Murray Financial are here to guide you. Contact us today or book a call back to start building a robust plan for your care home funding.

Crafting Your Care Home Financial Strategy

Navigating the complexities of care home costs and advanced planning to mitigate them requires a strategic approach. Assess your financial landscape, understanding how local authorities evaluate means, especially considering the impact of property ownership. Incorporate care home funding into your broader financial plan, ensuring compliance with legal requirements. Explore diverse funding avenues, and don’t overlook the emotional and social aspects of this transition. Develop contingency plans and, most importantly, seek professional guidance for a comprehensive strategy tailored to your unique circumstances.

Ready to embark on this journey with confidence? Our expert financial advisers at Mather & Murray Financial are here to guide you. Contact us today or book a call back to start building a robust plan for your care home funding.

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