The Cost of Caring
Catherine Alexander
Partner
Very few would agree that later life care provision in the UK is fit for purpose, and there is a distinct lack of knowledge and widespread confusion when it comes to funding that care. Long awaited care funding reforms from the government have been pushed back until after the next general election, and as our aging population increases, it’s more vital than ever to think about what it would mean to you, should you or a loved one require care.
Currently, this is how the system works:
The local authority conducts a needs assessment to work out if someone meets the criteria for requiring care.
The local authority conducts a financial assessement to work out how much the individual should contribute towards the care. If you have less than £14,250 in capital the state will fully fund your care, but if you have more than £23,250, the individual must pay their own care costs.
While some people may never pay for their care, others will be faced with huge costs. Figures from the 2023 LaingBuisson UK Market Report show that the average annual residential care home cost is now £58,240 for a self-funding resident. Even those who think that they would prefer to receive care in their own homes need to be prepared to fund the cost of adaptations to their property, this could include: reconfiguring bathrooms, relocating bedrooms, installing rails and ramps, stair lifts, and hoists.
So, where do people think they will get the money from? In a 2023 survey by Just, 56% said the money would come from pension savings and income, 31% from selling their house, 4% using an insurance solution, and 4% using a deferred payment agreement from the local authority.
It is understandable that people just don’t want to discuss this topic, it’s not something that any of us like to think about - especially when we are young and planning care seems a long way off. But speaking to an adviser as part of your ongoing financial journey can help to envisage the future, so that you can start putting the building blocks in place to make sure that you are ready if you do need care further down the road.
This article isn’t personal advice. If you’re not sure whether a course of action is right for you, ask for financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
