3 expert tips for paying for care

Amid the stress and confusion of arranging future care, it is easy to overlook the financial support available to you or be lured by promises that smart estate planning could reduce your costs.

However, by taking the time to learn your options and seeking help from professionals, you can get support in navigating the difficult landscape of care.

We asked three financial advisors who specialize in aged care for their key advice on financing care. All are accredited by the Society of Later Life Advisers (Solla).

1. See if you are eligible for any benefits

Catriona Smith, Independent Financial Advisor at Chase de Vere IFA Ltd and member of the Solla Advisory Board:

‘It’s worth looking at the obvious first and seeing if you’re entitled to any state benefits you’re not currently receiving. For example, in Scotland, anyone in need is entitled to a personal care contribution.

‘If you are over state pension age, you may be entitled to a pension credit and attendance allowance. The pension credit is available to those on low incomes, while the attendance subsidy is not means-tested. If you get rejected for being too rich (which I’ve seen happen), you can challenge that decision.

‘Someone who is unwell could be eligible for NHS Continuing Care (CHC), so it is worth seeking an assessment. There is a decision-making process to determine whether the individual has a “primary health need.”

pension credit

There are two parts to pension credit: guarantee credit and savings credit.

The guarantee credit increases weekly earnings to £218.15 for singles and £332.95 for couples in 2024-25 and is therefore limited to those whose earnings are below this level.

The savings credit pays up to £17.01 per week for a single person and £19.04 for couples. The amount you receive is reduced by 40p for every £1 your income exceeds the threshold (£189.80 a week if you are single and £301.22 for couples).

Assistance Subsidy

Assistance Subsidy It is paid at two different rates: £72.65 or £108.55 per week. This depends on the level of need rather than income.

You can access care allowance if you have a physical or mental disability that means you need someone to look after you, although you don’t necessarily have to have a carer to claim from.

If you move into a care home and your place is funded by the local authority, you may not be able to continue receiving care allowance.

Primary health needs

A primary health need, in terms of NHS CHC funding, could relate to one of several areas, such as breathing or mobility.

NHS funding is based on medical need and financial circumstances do not influence the decisions made.

Anyone who is in a care home and has significant care needs may also be eligible for NHS Funded Nursing Care (FNC). This covers additional nursing care needs, but not accommodation costs. There are two fixed rates of £235.88 per week or £324.50 per week.

• Find out more: benefits for seniors

2. Consider financing options for care in your own home

Mel Kenny, Chartered Financial Planner at Radcliffe & Newlands Wealth:

‘When money starts to run out to pay for care in your own home, you might think that the only alternative is a nursing home. Instead, your local authority could contribute to the cost of home care through means-tested direct payments.

‘Even if these payments were not enough, there is the possibility of gradually releasing the equity in the home through a lifetime mortgage, keeping local authority means-tested payments intact. However, this can be complicated and independent financial advice is therefore recommended.’

Direct payments

If you have a needs assessment If you contact your local council and decide you need help with social care and can’t afford it all yourself, you will be given a personal quote. If that money is paid directly to you, rather than to a nursing home or other care provider, it is called a direct payment.

Direct payments can give you the flexibility to organize your care however you want; for example, allowing you to hire specific caregivers you already know.

Release of shares

When you receive care in your own home, the value of your home is not included in the assessment of your assets.

Release of shares It is an option to release some of the equity in your home while you still live there, but if you move into a nursing home you will have to sell your home and pay off the loan.

Equity release won’t be suitable for everyone and can be costly if you don’t keep up with payments due to compound interest.

If you are interested in equity release, you will need to obtain financial advice from a qualified equity release advisor, ideally one who is independent, rather than restricted.

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• Find out more: pay for care at home

3. Don’t Try to Get Rid of Assets to Qualify for Financing

Samantha Gibson, Senior Wealth Planner at Canaccord Wealth:

‘If you are rich, it is a mistake to give away your assets to try to qualify for financial support.

‘For example, legitimate inheritance tax planning strategies, such as putting a house into trust or gifting items under the seven-year rule, could be seen as a deliberate deprivation of assets during the care assessment process.

‘Town councils are very aware of these strategies and are diligent when carrying out evaluations. If you have the means to pay for your own care, it is best to plan accordingly.’

Deliberate deprivation of property

If you apply for council funding, you will have a financial care assessment to determine if the value of your assets falls below the threshold (£23,250 in England and Northern Ireland, £32,750 in Scotland and £50,000 in Wales) to become eligible for support.

Deliberate asset deprivation occurs when someone gives away money, property or other assets in order to receive funding from local authorities. The council will review previously owned assets to consider whether any disposal was deliberate.

In the event of deliberate deprivation of assets, you would be obliged to pay the costs you owe, regardless of whether you can still afford them. The council can recover costs from both the person who disposed of the asset and the person who received it, and even resort to court proceedings to recover costs.

• Find out more: Can I avoid care costs by giving away property and assets?

Advice on your options

There is no one-size-fits-all answer to how to best finance aged care, so to find a solution that suits your needs and financial situation, you might consider working with a specialist financial advisor.

Not all advisors are qualified to deal with aged care financing, but you can look into Directory of the Society of Advisors for the Elderly (Solla) for accredited advisors in your area.

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