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An ageing population makes it likely that many of us will spend our later years in a residential setting. It is not something you should be worried about but you should try to prepare for it financially and plan your care home budget.
If you’ve found yourself or a loved one is considering residential care, first think about your care home budget. This article offers some helpful tips to consider when planning a budget to suit you and your care needs.
Think about your requirements
When planning for care home fees, it’s really important to remember that your quality of life is crucial to your wellbeing. Think about what you really want from a care home.
Your requirements are likely to influence which setting is right for you and the amount you will pay.
When working out your care home budget, think about:
- The care you need. For example, if you need nursing care in the future, this comes at a higher cost than residential care.
- Lifestyle factors that are important to you. Are you interested in continuing with hobbies?
- Religious preferences. Some care homes cater towards specific religions such as Judaism or Hinduism, ensuring residents can continue to practice their faith. If this is important to you, you might want to consider a care home that caters specifically to your denomination.
- Location. Perhaps you want certain family members or friends close by, or maybe you want to move back to an area where you previously lived.
- Size of care home. Although the quality of care should be the same, the size of the care home can affect the ‘feel’ it has, with smaller homes typically having a more family-feel
- Preferred Amenities. For example, an onsite bar, salon or en suite bedrooms.
Check what you’ll be expected to pay
Each country in the UK has different thresholds when it comes to paying for care. This refers to an amount of money that determines whether you’ll be expected to fund or partially fund, your care home fees.
If your capital falls below the lower threshold, your care will be fully funded by the local authority. but if it is over the higher threshold, you will need to fund your own care. However, if you are somewhere in between, you will be partly funded by the local authority and will be expected to contribute towards the cost.
If you would like more information, read this article explaining the thresholds across the UK.
Find out what help you are eligible for
Whether you’re covering the cost of your own care or are eligible for local authority funding, there are many different benefits that you could be able to get.
This includes:
- NHS Continuing Healthcare
- NHS Funded Nursing Care
- Attendance Allowance
- Personal Independence Payment
- Employment and Support Allowance (ESA)
- Pension Credit
- Basic State Pension and New State Pension
Of course, your eligibility for financial support will depend on your individual circumstances, but it is a really good idea to double check your possible entitlement to every payment. You never know what you might be eligible for. Just because you are not entitled to one type of benefit, it doesn’t mean you won’t be eligible for another.
Consider how your assets can help
When you begin your search for care, you will have a financial assessment to determine how much (if at all) you will be expected to pay towards your care home fees. This assessment will take into account your income and any capital you have, including savings or property.
If your capital is determined to be over the higher threshold in the country where you live, then you will be expected to fully fund your care. This is a fortunate position to be in because it gives you greater autonomy over your care options, when compared to funding through the local authority.
Think about quality of life
Whilst it may not be your first option to use your savings or sell your home in order to cover care fees, it is important that you think about quality of life, especially if living in a residential setting for many years. Making best use of your capital will help to ensure you are living somewhere you feel safe, comfortable and happy.
There are also other options, such as renting your home instead of selling it, and using this money to pay towards, or cover, your care home fees, which can make the prospect less daunting.
Bear in mind that without proper planning, you could find that decisions are made on your behalf when it comes to care home fees, so it’s a good idea to research the different options you have to ensure your capital is being used in the best way.
Beware of deprivation of assets
It is inevitable that you may want to protect your assets when it comes to funding care. Bear in mind that gifting your capital to family members or loved ones does not guarantee that this will not be included in your financial assessment.
If it looks like you have purposefully gifted money or property in order to avoid paying care home fees this could be classed as a deprivation of assets. You can read more about deprivation of assets in our article.
Check additional care home costs
Funding structures will differ between different care homes, and where some offer all-inclusive fees, many charge extra for additional services, such as trips out or the use of certain facilities, such as a hair salon.
In your budget, you might want to consider if you have a contingency, so to speak, to allow for additional costs once you’re all moved in, this may come from a monthly income, for example. Alternatively, if you’re working from your maximum budget, double check with the care home that you will not face any unexpected costs.
If you’re unsure about how care home charges work, this article offers a full breakdown on all inclusive-fees.
Paying for everyday costs
When it comes to budgeting, think about day-to-day costs.
This could include:
- Newspapers or magazines
- Toiletries
- Laundry
- Trips out
- Takeaways or meals out
- Shopping
- Hairdressers
- Chiropody
- Optician
Some of these costs may be included in your care home fees, but there are certain things that aren’t covered.
If you are privately funding your own care, you’ll need to factor in how much you think you will spend, to ensure that you’ve got the means to continue doing the things you enjoy. Think about what is important to you now and the things that are non-negotiable for you.
If you will be receiving funding from your local authority, things work slightly differently and you’ll be eligible for Personal Expenses Allowance (PEA), or Minimum Income Amount if you live in Wales. PEA refers to an amount of money that is set aside to cover these daily costs. It cannot be used to pay towards your care and is only for personal use.
You can also read more about Personal Expenses Allowance.
Arguably, the most crucial aspect of planning your budget is equipping yourself with as much knowledge as possible. Whether you are searching online or visiting care homes, find out as much as you can about the different care homes in your chosen location. Considering what they offer as well as how much they cost. This will ensure you are choosing the right setting that will suit you now and in the years to come.
carehome.co.uk offers a search option where you can browse residential settings based on location, amenities and the highest review score. The website has over 300,000 reviews from residents and their friends and family. Visit carehome.co.uk to start your search.
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