5 tips to help you pay for a care home

Across the UK, almost half a million people are living in a care home. Although making the choice to move to a residential setting can be a stressful time, proper financial planning will make it a smoother process.  

Ideally, we should all be starting to think about funding care whilst we are working age. However, not many of us have the foresight to put this into action, maybe because of limited finances or just not wanting to think about it. Unfortunately it’s often not until you or your loved one, require care that you begin to really think about it. 

Here are a few tips to help you with the initial stages of funding a care home for yourself or a loved one. 

Work out your personal finances

First, you should find out whether you will be expected to pay anything towards your care home fees. This will be dependent on the amount of capital you have and whereabouts you live in the UK.

In each country, there is a threshold which determines whether you will be state-funded or self-funded. In other words, whether the local authority will cover the cost of your care (or part of it) or whether you will be expected to cover care home fees yourself. 

Each country has a higher limit and lower limit threshold. The higher limit sets the boundary for how much capital you can have before you are required to fund your care completely. The lower limit sets the boundary for being completely state-funded.

If your capital sits in the middle of these two thresholds, you will be expected to partly cover your fees whilst your local authority will also contribute. 

Care home fee thresholds

England

Higher limit – £23,250

Lower limit – £14,250 

Scotland

Higher limit – £35,000

Lower limit – £21,500

Wales

Higher limit – £50,000

Wales differs from the other countries in the UK as there is no lower limit. So if your capital is less than £50,000, you will automatically have the full cost of your care paid for. 

Northern Ireland

Higher limit – £23,250

Lower limit – £14,250

Whether you are required to contribute towards your care or fund it completely, you will need to consider where your capital currently is. For example, in savings or in property, as any assets will be considered in paying for your care, now and in the future. 

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There are a number of advice articles that go into detail about paying for a care home and specifically what this means for your capital and assets. You can find this in the advice section.

Plan a budget

Once you know whether you’ll be offered state funding or covering your fees yourself, you should start to think about what sort of budget you have. This applies in either situation as there will be limits to what local authorities will pay, depending on your needs and location. 

When planning your budget, it’s good to think about:

Your care needs

Care home fees differ depending on the level of support you need. If you only need residential care and are funding your own care, the average weekly cost is £1160, whereas this increases to £1410 for nursing care. If you’ll be receiving funding from your local authority these averages will differ. 

You should think about your care needs before anything else. 

Your location 

Care homes in certain parts of the UK cost more than others.

If you are in a particularly expensive location and are funding your own fees, you might consider relocating to get more for your money.

If you are going to be state-funded, it may be more difficult to relocate but not impossible. Once your local authority has carried out your assessment, they will still provide you the same funding if you choose to move to a different area. If this area has lower care home fees, your local authority will usually not reduce your allocated funding. If the area has higher care home fees, the local authority may be willing to increase your funding, but this will depend on the decision of individual authorities as well as your personal circumstances. 

In either case, you should think about proximity to loved ones and where you would really like to live.

What you’d like from a care home

Aside from the things you should be able to expect from all care homes, such as quality care and a nice environment, different settings sometimes offer different things for their residents and how they like to live their life. 

For example, there are care homes which cater to specific religions, such as Judaism or Hinduism, whereas some are better located for getting out and about in the local community.  

When planning your budget, you might also consider whether it’s possible to pay a top up fee. Top up fees allow a third party, such as a family member or friend (not the resident), to pay an additional amount on top of what the local authority is willing to pay to cover the costs of a care home you prefer. 

Research what financial help is available

If you are required to pay towards your care home fees or fund them completely, you may be entitled to financial support from the government.

Examples of benefits you can receive whilst living in a care home include:

• Basic State Pension and New State Pension 
• Pension Credit
• Employment and Support Allowance (ESA)
• Attendance Allowance
• Personal Independence Payment (PIP)
• Disability Living Allowance (DLA)
• Industrial Injuries Disablement Benefit (IIDB)
• Armed Forces Independence Payment (AFIP)
• Universal Credit (UC)
• Bereavement Support Payment (BSP) 
• Statutory Sick Pay (SSP)

Bear in mind that these are only examples of the benefits that are available to care home residents. Whether you are eligible will depend on your individual circumstances.

To find out more about different financial support you might be entitled to, read our article here.

Find out what the care home fee covers

When looking at potential care homes, you should make sure you ask for all the information you need when it comes to how much things cost. This will ensure you’re not caught off guard by any unexpected fees later down the line. 

Some care homes offer all-inclusive fees whereas others charge extra for certain things, and whilst they do work hard to make sure their fees are transparent, it’s easy to miss things when you’re going through the process of finding, funding and moving to a care home. 

Examples of additional charges include:

• A ‘better’ bedroom – for example, it might have a nice view or access to a private patio.
• Trips out – most care homes plan trips out, but it is common for residents to be asked to partially fund this themselves. For example, for cinema tickets or meals out.
• Food – all homes should offer 3 meals a day and snacks as standard, but some may charge extra for anything outside of this, for example to order a takeaway.
• Use of additional facilities – some care homes have amenities such as a hair and beauty salon or an on-site pub which residents will pay for on top of their base fees should they choose to use these.

You can find out more about all-inclusive fees .

You can also read about what questions to ask when finding a care home.

Make sure you have enough savings to cover care home fees

When planning your care home funding, it’s really important that you think about what position you, or your loved one, might be in later down the line. Although nobody can predict the future, often the type of support a person needs when they first move to a care home won’t be the same as what they need in years to come. 

You should carefully consider whether you can cover the cost of care homes fees for the foreseeable future. It’s not uncommon for people to be forced to move to a different home due to the increased price of support or simply running out of money.

Moving to a different home can be detrimental to a person’s physical and mental wellbeing. 

Proper planning is the best way to prevent this situation from occurring and ensure you don’t face any avoidable issues when it comes to covering care home fees.