As we get older, it’s not unusual to need some form of care – whether that means support in our own homes or moving into a specialist environment. When possible, staying in the home that you know and love is often the preferable option, but it can also be an expensive choice. If you need a live-in carer to provide support around the clock or modifications to make the property more accessible, then it could be even more costly.
There are a number of different options available for funding stay-at-home care. We’ll run through a variety of choices available – and remember, these could also be suitable for elderly parents, friends or relatives who you are concerned about.
Please note that all of the information below is correct to the best of our knowledge at the time of publication. We encourage anybody looking into the costs of care to do further research into the options that interest them.
1. Regular income
If you have sufficient income from your pension or other sources then you can, of course, use it to cover the cost of care. Many people will only turn to other options if their regular income does not give them enough to cover the expenses incurred by care needs.
This may include
- The income from a spouse or partner
- Regular income from a pension
2. Equity release
For those who are asset rich but cash poor, equity release can be used to unlock some of the money that is tied up in your home. This is released as tax free cash, and can be used in any way you choose.
- You may want to use the equity released from your home to pay for the costs of stay-at-home care, or to pay for any alterations that may be needed in order to make your home more accessible.
- If you do wish to use the money to make larger changes to your home then this is something you should discuss with your equity release adviser and provider before going ahead, to ensure that it will be allowed under the plan that you choose.
- Similarly, you should consult with your equity release adviser first if you intend to have a live-in carer.
- The most popular form of equity release is a lifetime mortgage, and this is a loan which is secured against your home.
You can learn more about equity release here
- Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.
– and if you’re considering going ahead, please consider your options carefully and read ‘is it right for you?
’ Unless you decide to go ahead, Key's service is completely free of charge as Key's usual advice fee of 1.99% of the amount released would only be payable on completion of a plan, subject to a minimum advice fee of £1,499.
Moving into a smaller home may free up some cash which can then be used to pay for stay-at-home care within the new property. If there is enough money left over from the sale of your current home to buy a suitable property and
cover the cost of care then this may be a suitable option.
However, if having care in your own home (or helping a loved one receive care in their home) is important to you because you care about the current house, this may not be an option that appeals to you. Moving can also be stressful and difficult, particularly if you already have care needs.
4. Government help
Not everybody is entitled to help from the government for home-based care, however it is often worth looking into. Your local authority will perform a ‘needs assessment
’, considering what they think you need help or support with, what type of support is appropriate, and how much money they will put towards funding it.
If you think a needs assessment is suitable, you can arrange it through your GP, adult social services, or local authority website. You can also apply for a needs assessment on behalf of somebody else.
There are also a number of benefits that you may be entitled to claim
- The Personal Independence Payment if you are under 64
- Attendance Allowance if you are 65 or over
- Council tax discounts or exemptions
5. Personal savings
Remember that private savings do not necessarily mean that you can't seek help from the government. You may consider funding the cost of care in your own home as a good use for your savings – although some people prefer to keep hold of them in case they need to move into residential care in the future.
Family members with substantial savings of their own may well be willing to help you fund part of your care, and if this is a route you wish to go down it's important to be clear on
- Whether the money is a loan or a gift
6. Letting out a spare room
If you have a spare room in your home, you may want to consider letting it out to a lodger, bringing in a regular monthly income. While this can provide the stability of receiving a fixed amount of money on a monthly basis, there are risks involved. You are relying on your lodger to uphold their end of the contract and, unless you know them beforehand, inviting a stranger to live in your home is not a decision to be taken lightly.
There is also a lot of work involved in renting out a room, as you will have a number of obligations to your lodger, so make sure you know what’s involved and that you can definitely manage it. You may also want to look into the Government's rent-a-room scheme, which allows eligible individuals to receive tax free income from renting out a room in their home, up to a certain threshold - find out more here
Please remember that this is not an exhaustive list! There are other options out there, including charitable and not for profit organisations that may be able to offer help. However, this article covers some of the most popular choices - and we hope that it provides a useful starting point for deciding what care payment options may be suitable for you.