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The cost of care
Given the opportunity, the majority of us would choose to remain in our own home as long as possible. However, as we get older, it’s not unusual to need some form of care. This could be anything from modifications to your home, such as installing a stair lift or adapting your bathroom to physical assistance from care workers to help with the likes of cleaning or administering medication.

Live in care can be an expensive option and as your needs change, so will your finances.

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. Everyone’s circumstances are different, so we encourage anybody looking into the costs of care to do further research into the options that interest them.

Regular income
If you have sufficient income from your pension or other sources then you can, of course, use it to cover your care costs. If you are paying fees yourself, then you can arrange and pay for your own care, but your local council should provide advice to support you.

Financial support
The first step – no matter whether it’s home modifications or a full time care home place – is to get a care needs assessment from your local council. This will include a financial assessment, called a means test, which may take into account the value of your property, if you own one, as well as your income and savings.

There are also a number of non-means-tested benefits you may qualify for:
  • Attendance Allowance: For people over 65 who need extra help to stay independent at home due to an illness or disability
  • Personal Independence Payment: For those under 64 who may need help with daily activities or getting around due to long-term illness or disability
  • Council tax discounts or exemptions
  • If you have a carer, they may be eligible to some additional benefits such as Carer’s Allowance

Equity release
If you are a homeowner between 55 and 95, equity release could be used to unlock some of the money that is tied up in your home. This can be released as a lump sum or in smaller amounts following an initial lump sum.
  • 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 recommended.
  • 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.
  • Equity release will reduce the value of your estate and may affect your entitlement to means tested benefits.

You can learn more about equity release here – and if you’re considering going ahead, please consider your options carefully and read ‘is it right for me?’ 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.

Personal savings
Remember that personal savings do not necessarily mean that you can't seek help from your local council. 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
  • Why you need the money
  • Whether the money is a loan or a gift 

Moving into a smaller home could 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 wish to stay where you are, this may not be an option that appeals to you. Moving can also be stressful and difficult, particularly if you already have care needs.
There are many options out there to help with funding for care, including charitable and not-for-profit organisations. This article covers some of the most popular choices, so we hope that it provides a useful starting point for deciding what care payment options may be suitable for you.

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