Latest news with #carecosts
Yahoo
2 days ago
- Health
- Yahoo
The cost of caring for a loved one
It's Carers' Week, when we're encouraged to recognise the effort put in by unpaid carers looking after their loved ones. As more people live longer and need more care, it should also be a chance to consider what we'd do if we found ourselves in this position, and someone we love needed care. You might want to step in and help, so it's worth understanding the potential costs — from the extras you'd need at home to the cost of any lost income. In many cases, the whole family will need to have a frank conversation about how to support the person offering care, as well as the person needing it. If your family member needs professional care, the question of costs becomes even more pressing. On average, you'll pay about £50,000 a year for residential care and £66,000 for a nursing home, but the averages hide some big costs, and plenty of people pay well over £100,000 a year. You may be able to get some help from the state, but there's a process you need to go through first. It starts with a "needs assessment", done by your local authority, who will work out what care the person needs. Read more: How much does it cost to become a driver in the UK? Next you go through a financial assessment, which looks at the assets of the person needing care. If they're getting care at home, or they're in a care home temporarily, this assessment won't include the value of their own home. If they're going into a care home permanently, it may include their home, unless someone from specific groups also lives there. This includes a partner, any of their children under the age of 18, or a relative who is disabled or over the age of 60. In England, if they have assets of less than £14,250, the council may pay for care — although it will also take their income into account. If they have between £14,250 and £23,250, they will have to contribute to the cost of care, but if they have assets over £23,250, they'll need to foot the entire bill. If your loved one has complex medical needs, they should be assessed for NHS Continuing Healthcare. This can pay for all their care in some cases, but don't assume they'll qualify. It's not enough to have caring needs around the clock, they'll have to have very high medical needs too, requiring regular intervention from medical experts and professionals. If you end up needing to pay for care for someone, there are a few benefits that will help. If they are over state pension age, they could get the attendance allowance — or pension age disability in Scotland. However, this will barely scratch the surface of costs. It means you may need to speak to anyone in your life who might need care, to see what preparations they've put in place. A piece of research we did a while ago found that fewer than half of people thought their loved ones could pay for care from their savings. It means you should consider their pension too. A guaranteed monthly pension income will go towards the cost of care. If they're using pension drawdown, they may have money in their pension pot that can be used too. For younger people, this often makes sense as a way to save for your own care needs, especially if you're saving into a workplace pension and your employer is helping to build the pot. Read more: What is the Pension Investment Review? However, the value of the property will often need to be used. Some people will rent the family home out to cover fees, although this is risky because rental income isn't guaranteed, and will be depleted by maintenance and repairs. You can consider equity release to free up some of the value in the property, but this is expensive. There will be a set up cost, and usually any interest on the loan will roll up, and needs to repaid when the property is sold. There's also the option of a deferred payment arrangement with the local council, which is a bit like equity release, but run by the council and slightly less expensive. But for many people, the most sensible option ends up being selling up. You might pay fees from the lump sum as you go along, but it's worth considering an immediate needs care annuity instead. These pay a fixed amount to the care home every month for the rest of their life, and tend to cover the gap between pension income and the cost of care. Talking to your loved ones about care, and how they'd pay for it, is difficult, but it's a far easier conversation well in advance, when they have time to make a plan. It's much more stressful to try to discuss this at the point they already need care and are starting to panic about how they're going to pay for more: How to tell if you're rich Should people keep working until later in life? How to get your children to move outError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
2 days ago
- Business
- Telegraph
Alternatives to long-term care insurance and how to pay for care
The spiralling cost of long-term care is a concern for many in Britain's ageing population, especially since it can be difficult to get state support. Long-term care insurance used to offer individuals protection to help cover these costs, but these policies no longer exist. However, there are alternatives. Here, Telegraph Money explains what your options are to help meet care costs, and how much you might expect to pay. What is long-term care insurance? Why is it no longer available? Alternatives to long-term care insurance Cost of long-term care in the UK Can the Government fund long-term care? What is long-term care insurance? Long-term care insurance is a legacy product that provides protection for later in life care costs. The policies are no longer available on the market to buy, although customers may still be receiving payouts from existing plans. Policies provided holders with a regular income to pay fees for a nursing home or for home care, according to the Financial Ombudsman Service. This could include round-the-clock care in your home or for particular services, such as help with bathing and dressing. Why is it no longer available? Part of the reason long-term care insurance came to an end was the escalating costs of care and increasing life expectancy. Combined, this made it unaffordable for policy holders. As there is no cap on the cost of care in the UK, it became too hard to develop a workable product. Under Boris Johnson, the Conservatives had planned to introduce a £86,000 cap on the amount individuals would have to pay towards their own care costs, after which the state stepped in. However, since coming to power last year Labour has announced that it will not go ahead with the previous government's plan. As a result, many individuals will have to continue contributing high amounts to their care costs. There are around 130,000 care home residents who self-fund their care, according to the Office for National Statistics. Alternatives to long-term care insurance While long-term care insurance is no longer offered in the UK, there are other options that help meet individual care needs. However, they are not comprehensive and so you need to make sure you know what is and isn't covered and how that corresponds to your needs. It is also worth checking that you don't have an old long-term care insurance policy or existing coverage through long-standing life insurance. Care fee annuity A care fee annuity, also called an immediate needs annuity, is designed to bridge the gap between your income and the cost of your care for the long term. An immediate care annuity works in a similar way to a normal annuity, where you receive a guaranteed income – but the money goes directly to your care provider rather than to you. As the payment doesn't come to you it isn't classed as income, and therefore isn't taxable. It helps avoid a situation where you are left without the funds necessary to pay for care. However, this kind of product requires you to provide a named care provider in order to access the money, which means you must either already be receiving care, or you're just about to start receiving care and know which provider you'll be using. To buy an annuity of this kind it is best to find a financial planner specialising in long-term care. You may have to complete a medical assessment for a prospective provider so they can estimate your likely needs. Your annuity rate – the amount of money you are given – will depend on a variety of factors, including your age and medical history. It is also worth looking at an option to protect against fee rises by increasing your annuity payment annually by a fixed percentage or inflation. Sarah Pennells, consumer finance specialist at Royal London, said: ' Making decisions around care, for yourself or a parent, are never easy, but thinking about how you would pay care fees, ahead of any crisis, is a sensible approach to take. 'One of the options to consider is whether an 'immediate needs annuity' is right for you. There aren't many insurers who offer this product, but it can be bought at the point that you need care. 'In exchange for you paying a lump sum to an insurance company, it could pay your care costs for as long as you live. 'Although not cheap, as they can cost tens or even hundreds of thousands of pounds, these products can be a big help if you have capital or savings you want to preserve. 'However, depending on how quickly care home fees rise, they are not guaranteed to cover care home fees in full for as long as you need them.' Critical illness cover Critical illness cover is a form of life insurance that will pay out a lump sum if you are diagnosed with an illness covered by your policy. The policy holder can then use that money for any costs, such as necessary long-term care. However, you will need to ensure that your illness is covered by the policy to get a payout, otherwise you could be left with costs that aren't covered. Conditions that are likely to be covered include strokes, Alzheimer's and cancer. Critical illness insurance doesn't just cover care later in life, but can also be taken out at a younger age to protect against illness. Some providers also offer policies designed to provide cover for children. However, there may be a maximum age that you are still eligible to take out the policy. For Aviva, for example, it is 64. Prices for critical illness cover vary based on factors such as your age, health and level of coverage, but premiums can be as cheap as £12 a month with an average of £29 a month, according to comparison site MoneySupermarket.
Daily Mail
6 days ago
- Business
- Daily Mail
EXCLUSIVE Areas where care homes cost double for self-funders - is YOURS on the list?
Care seekers are increasingly being left with no choice but to fund help themselves as the social care means testing threshold remains frozen and costs continue to grow. The vast majority of care seekers in the UK are self-funding, with some 66 per cent paying for their own care, compared with just 16 per cent of people reporting they were able to access care funding from their local authority. People with assets worth more than £23,250 have to fully fund their own care, and others will have to contribute to their care costs unless their assets are worth less than £14,250. These thresholds were set way back in 2010, with £23,250 in 2010 now equivalent to £35,805 when adjusted for inflation. With staffing, infrastructure and resource costs continuing to increase, care home fees have risen for the 2025/2026 financial year. As many as one in seven independent nursing homes now charge over £1,800 per week, according to LaingBuisson data. Hannah Karim, lead care expert at Online Care Finder Lottie, said: 'Each year care operators increase their care fees to cover the increasing cost of running a care home such as resources, energy bills and infrastructure. 'However, in recent years the increased cost has been much higher than previously. 'For example, the predicted increased costs for running a care home from 1 April 2025 averages £158,323.96 a year before additional costs such as increased energy bills, utilities and everyday essentials are considered due to rising employer contributions.' With fees rising, the disparity between how much self-funders are forced to pay in care fees and what local authorities pay continues to grow. In some areas, self-funders are paying almost twice as much as those funded by the council, according to data from Lottie. The starkest divide seen by the firm was in Solihull in the West Midlands, where the average care cost for a self-funder is £1,358 per week, £585 more than the standard fee of £773 per week that the area's council pays to care providers for someone who qualifies for financial support. Over the course of a year, this equates to £70,616, compared to a local authority cost of £40,196. Likewise, in Blackpool, self-funders pay out an average of £1,166 per week, some £566 more than the £600 paid by the local authority. In Manchester the disparity was £529, with those self-funding paying £1,295, while in Cornwall the disparity was £476, with the council paying as much as £1,002 per week on average, but self-funders paying £1,478 per week. Karim added: 'With costs rising, many care operators are having to make tough decisions, last year one in seven care providers reduced the level of service they offer. 'While many local councils are raising fees to help offset rising costs, these increases still fall short of the overall growth in care expenses over the past decade. 'As a result, the extra financial burden is being passed on to self-funding residents, leaving those who pay for their own care particularly vulnerable to higher charges.' Karim says 65 per cent of those looking for elderly care are struggling to be able to pay for the services they need. She added: 'The financial burden on families seeking care is becoming overwhelming. 'Every day, we hear stories from individuals struggling with the challenges of funding care for their elderly loved ones. 'Many are forced to make difficult decisions, often looking to sell their homes or dipping into personal savings, just to afford essential support. 'With an ageing population the government must act sooner to support families in accessing care to ensure affordable and sustainable care options remain available for all.' Where is the biggest fee gap? Region Council 2025/2026 Rate Self-Funder Weekly Fee Weekly Cost Difference North West Blackpool £600 £1,166 £566 South West Cornwall £1,002 £1,478 £476 West Midlands Wolverhampton £631 £1,061 £430 West Midlands Shropshire £983 £1,274 £291 Yorkshire & The Humber Bradford £766 £935 £169 East Midlands Staffordshire £948 £1,292 £344 West Midlands Birmingham £728 £1,125 £397 North West Manchester £766 £1,295 £529 North West Bury £707 £950 £243 North West Blackburn £751 £990 £239 West Midlands Solihull £773 £1,358 £585 I was forced to sell my parents' home to fund care One care seeker, 60-year-old Sarah, whose parents are in care in Oxfordshire, told This is Money her parents' residential care home informed her that they would be increasing their annual fees by more than £21,000 for her parents combined. The increase would mean paying out £174,773.60 per year for her parents' care, and increase of 13.85 per cent on the £153,600, she was paying previously. The care home gave 28 days' notice of the change, Sarah said, but argues that this wasn't enough time for her to negotiate on price. She said: 'This is the third care home I have had an experience with and there doesn't seem to be a clear set standard increase across the sector and the lack of transparency has left me feeling confused and frustrated.' Instead, Sarah felt forced to relocate her parents to a new care home with lower fees. Sarah had sold her parents' house in order to fund their care fees, meaning that she felt she had to make sure the money was put to good use. She said: 'I had to sell my parents home to fund their care, and promised them I would make every penny count, so with this in mind, we decided to look into new care home options.' She added: 'It has been a stressful decision to uproot my parents and move them to a new care home. 'This has been especially concerning because I am worried about the impact the change in environment would have on my parents' wellbeing, not just getting used to a new environment but also to new faces at the home and people providing care.' Even prior to the increase in fees, the care home in question had been reducing its services. Sarah told This is Money: 'Over the years, I've noticed that additional costs have been introduced for services that would have traditionally been included in the weekly care fee. 'For example, items like toiletries such as toothpaste and shower gel, podiatry appointments, and hairdressing have now started to be billed separately.' These extra charges meant that the £1,600 fee was just part of what she was paying. She said: 'One specific charge I have been paying monthly is for toenail cutting appointments for both my parents, which cost £40 per month.'
