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Care home funding advice

Paying care fees is expensive for both residential care in a care home and care services in your own home. The care system can be complicated and difficult to find your way through and research suggests the majority of people receive insufficient advice about how care fees can be funded.

The bottom line is that the vast majority of people who have to meet their own care costs are unlikely to be able to do this without using up at least some of their assets. The most common approach for funding any ‘shortfall’ between existing income and care costs tends to be to simply draw down what is needed each month from savings, and perhaps property sale proceeds, and hope that these do not run out completely.

Eldercare Solutions specialises in advising on care home funding for self-funders and we believe that such an important decision should only be made once you are in possession of all the facts. This is especially important if you are making decisions under a Power of Attorney as it is your duty to act in the other person’s best interests.

Please read on for further information on care home funding and paying for home care services or visit the Care Fees Advice Journey page to see how our experienced advisers go about finding the correct care solution for your individual needs.

Paying for later life care – Eldercare Group
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Couple receiving care home funding advice

Costs: what Government support can I expect?

If you are eligible for funding support, your local council could pay some or most of the fees. The council will carry out a care needs assessment. If this concludes you need care in a care home, they will carry out a financial assessment to work out whether you qualify for help with the cost. This will look at your income and capital.

If you have capital currently totalling in excess of £23,250 (in England) you will not qualify for assistance from your Local Authority until such time as your capital drops below this amount (or equivalent limit at the time). In this scenario, you will have to meet your care fees in full, from income and capital and most savings and assets are included in the Local Authority financial assessment.

Will I have to sell my home to pay for care?

While most savings and assets are included in the Local Authority financial assessment, there is a lot of confusion surrounding the subject of whether or not a person’s home is included. Please download our ‘Paying for care’ guide for more information or get in touch with our friendly advisers.

If you do need to sell a property to cover care home fees, please visit the Property Solutions page for information on how we can help you through this process.

Paying for later life care – Eldercare Group
Download our FREE ‘Paying for care’ guide
Saving money through care home funding advice

Care home funding options

Paying directly from capital

This is the most common approach, although research suggests that this has more to do with lack of awareness of alternative funding methods than because it is the most suitable. In most cases there will be the possibility of the capital running out.

Investing the capital

If you have a significant amount of capital, then investing it wisely may produce the income required to meet the shortfall. For most people, however, this method of funding carries a degree of uncertainty and risk and erosion of capital is likely to occur.

Care fees annuities

Purchasing a care fees annuity is a genuine alternative to meeting care costs directly from capital or investments and will pay out a guaranteed, tax-free income for life. This is not the same as a pension annuity which would offer a much lower and taxable income because it does not take into account the age and state of health of the individual.

A combination option

The final option might be to simply ‘insure’ part of the fees shortfall using the care fees annuity and then use an appropriate investment vehicle to generate the income for the balance. There needs to be a reasonable amount of capital available to make this work and it is imperative that the split is correct to avoid erosion of capital.

It’s difficult making financial arrangements on somebody else's behalf but Eldercare were so patient throughout the process. I cannot fault our dealings with this Company, which resulted in the purchase of a Care Fees Annuity for our relative, giving us complete confidence and peace of mind that he can stay in the Residential Home he is so happy in, for the rest of his days.

Customer in Essex

Having contacted other ‘specialists’, I felt that Eldercare provided the clearest advice about Care Fees Annuities. The information was precise, balanced and I was not pushed to look at other financial products. I valued having a contact always available at the end of the phone with whom I could discuss my queries, which were dealt with in a compassionate and caring manner.

Mr J Morse

Having my mother suddenly need to be in a Care Home was a shock to the system and the cost implications left us very concerned what the long-term position was going to be. Thankfully I was put in touch with Eldercare who helped guide us through the options. Now that we have a financial plan (and therefore a permanent solution) in place, I can rest easily.

Mr Davies, Cambridgeshire

Having purchased a Care Fees Annuity, all I can say is that Eldercare were highly professional and efficient throughout the whole process. I would recommend any family with a loved one entering a Care Home to call them. I can assure you it will be worth it. Without their specialist advice, it is highly unlikely that the best funding solution will be found.

Customer in Norfolk

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Call: 01438 360082 or 0800 082 1155
Email: advice@eldercaregroup.co.uk
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Achieving the Later Life Adviser Accreditation (LLAA) and becoming a member of the Society of Later Life Advisers (SOLLA) is an endorsement of our skills and experience of working with, and understanding the needs of, older people, their families and carers. It is widely recognised as the Gold Standard in later life financial advice.