Many people who use care and support services will pay for all of the costs. This is known as being a "self-funder".
The cost of your care will vary depending on its type, intensity, specialisation, location and duration. For example, a place in a residential care home will cost hundreds of pounds a week.
To make decisions that have such major financial implications, you may want to seek independent financial advice and it’s always worth researching the costs of alternatives first. For example, if you are considering a care home place, the cost should be weighed against the cost of care and support that may help you remain in your current home, such as homecare.
How much will care cost?
If you are thinking about your future care needs or are facing immediate decisions about care options, it can be helpful to get an idea how much care can cost.
Inevitably, the price you would pay will depend on your particular circumstances and needs. The costs also vary depending on where you live. Unfortunately, care homes and homecare agencies tend not to provide this information publicly but you may find it helpful to search for and contact care services in your area to get some idea of likely costs.
The ‘cap on care costs’
Currently, it is not easy to plan for your future care needs, as it’s hard to estimate how long you will need care for and how your circumstances may change. From April 2020, a "cap" on the costs of meeting your eligible care needs (but not accommodation associated with care or nursing costs) is being introduced. The cap means that, once reached, the local authority will take over paying the cost of their eligible care needs.
The cap will not cover your daily living costs. These costs include expenses such as rent, food and utilities and the costs you would face even if you did not have care needs. It is important to note that daily living costs will be a nationally set figure. This figure will be a "notional" amount rather than the actual costs. This is designed to support consistency and enable people to plan.
To benefit from the cap once it comes in, you will need to contact your local authority to see if your needs are eligible. If you are seen to have eligible care needs, the local authority will open a "care account" for you. This account records your progress (the amount of costs you have incurred) towards the cap.
The cap does not begin until April 2020 and any costs incurred before this will not count towards the cap.
The BBC’s care calculator can estimate how much you may have to pay for care services depending on where you live in England, once the new rules are in place. This will give you an idea of how the cap will work for you, but actual costs will vary to reflect your individual circumstances and needs and how they change over time.
For more information on how paying for care is changing from 2020, read about the changes in the Care Act.
Ask for help from your local authority
It's worth checking whether you're eligible for means-tested support from your local authority or other financial support – for example, through a care needs assessment and a financial assessment.
Few of us will have the income or ready access to the cash to pay for our ongoing care needs, and you may need to look at selling or remortgaging any property you may own. The new Care Act means more people may be able to benefit from "deferred payments".
Deferred payments can help people avoid being forced to sell their home in a crisis in order to pay for their care by having the council temporarily cover the cost – usually until you sell your property.
Following the Care Act, every local authority in England has to make deferred payment agreements available.
As an alternative, you may be able to enter an "equity release scheme" with a financial organisation. Equity release can pay for the fees from the value of property you own. However, you should consider which of these options best meets your needs, and what the overall costs to you will be.
Before taking such significant financial steps as equity release, you might want to get independent financial advice. You can find information on equity release for care at home from Which? Elderly Care or the Money Advice Service's equity release information.
If you’re planning ahead, you may consider arranging an investment or insurance plan to fund your care. Again, it may be worth taking independent advice on financial arrangements before making major changes. Because of the new rules, there are likely to be more financial products emerging that are designed to help people pay for care.
You may also want to explore whether the NHS would meet some or all of your care and support costs, or you may have entitlement to benefits that may help you meet costs. Read about other ways of funding care.
Advice on paying for care
Even if your local authority is not able to help fund your care, it will be able to make an assessment of your care and support needs. From this, the local authority can provide you with access to a range of information and advice available locally.
You can also get independent advice from:
- The Money Advice Service website: offers information on paying for care or the option to speak to an online adviser. You can call the Money Advice Service on 0300 500 5000.
- The Society of Later Life Advisers: the society can also help you find advice on how to make financial plans for care in your old age.
- Find Me Good Care: a website of the Social Care Institute for Excellence. It has advice on all aspects of planning and funding social care.
- Age UK: has great advice for older people and those planning for their later years.
- Carers UK: an excellent resource of advice for carers who need to help someone else.
- Which? Elderly Care has a guide to financing care.
Deferred payments if you are unable to pay for care services
Care home fees are a big financial commitment, and the decision to go into a care home is often made at a moment of crisis or urgency, such as when being discharged from hospital. This can make finding the money to pay for fees (usually several hundred pounds a week) challenging for people funding their own care.
In particular, if you own property outright but have little in the way of savings, you may be expected to fund your own care but have little immediately available money to pay for it. Some people going to stay in a care home for a long time find that they have no option but to sell their property to pay the care home fees.
Your council may be able to help you if you are at risk of having to sell your home. Where there is a delay in selling the property, or you don’t want to sell the property immediately, you may be eligible to have your care fee payment "deferred". This is where the local authority helps you to pay your care fees temporarily, and you repay the costs to the local authority at a later date.
If the local authority agrees to the deferred payment and pays the care home fees, it will take payment from the money raised once the property is sold. This can be:
- during your lifetime if you choose to sell your home
- once you die, the local authority can be repaid from your estate
All councils must offer people the chance to defer payment if they meet a set of eligibility criteria.
A deferred payment scheme is only available if you don't have enough income to cover your care home fees, and you have less in savings than £23,250. In these circumstances, the savings don't include the value of your property, but does include money in bank accounts.
The local authority will put a "legal charge" (similar to a mortgage) on the property and will then pay the remaining care fees in full. You will then be assessed to see whether they are able to pay a weekly charge to the authority. Your ability to pay is based on your income less a set "disposable income allowance" (currently £144 per week).
Before considering deferred payments, you should look into whether the property will or won't be counted in how your capital is calculated. For instance, it may be disregarded because your partner still lives there, and if it is a deferred payment agreement wouldn't be necessary.
It's wise to get independent financial advice before agreeing to a deferred payment, and it’s worth bearing in mind that choosing deferred payments can impact on some welfare benefits.
Protection for self-funders
While you may have the savings in place to afford care services, if you lack the capacity to make the arrangements, the local authority can step in to help.
The local authority can also help people who lack capacity by negotiating fees with a care provider and paying them directly. The local authority will need to be reimbursed.
Anyone entering into a contract for care services should be given adequate information about the fees. Care providers should supply:
- information about the fees charged for various services provided
- arrangements for paying the fees
- the fees charged for any additional services
If your capital falls below the set levels for local authority funding (currently £23,250), you will be eligible for reassessment for help with funding your care.