People who don’t qualify for care funding from their local authority or the NHS continuing healthcare will have to self-fund. In fact, most people in the UK who need long-term care pay something towards the cost of it, and many pay for all of it. For this reason, it’s important to understand your options for self-funding.
If you’re planning to self-fund live-in care for yourself or a loved one, Vitality live-in care can put you in touch with a financial adviser who can help you come up with the best option.
Self-funding options include:
Some people will find that their retirement income such as their pension, savings and other investments may be enough to cover the cost of their live-in care. A financial adviser can help you structure your finances to ensure that you have enough money for the long-term.
If you own your property, you may be able to release an amount of equity to fund your care costs and still stay in your own home. A financial adviser will be able to advise you on your options. It’s also a good idea to involve your family in the discussions to ensure that the best solution is reached.
Immediate care plan
An immediate care plan (ICP) is a financial policy designed to cover all or part of the cost of care fees. It’s usually taken out by the partner or another relative of the person in care.
An ICP pays an agreed tax-free amount at regular intervals directly to the care provider for the rest of the cared-for person’s life. Benefits can increase over the years to help keep pace with care fees. A lump sum is needed to purchase the ICP and this is calculated individually on age and health.
Immediate needs annuity
An immediate needs annuity, or care fees plan, is an insurance policy. In return for the upfront payment of a one-off premium, the annuity provides regular income to cover the cost of care. The size of the premium is based on an assessment of the care needs. You can also arrange for the annuity to be paid direct to your registered care provider, which means it will be exempt from tax.
Don’t forget your state benefits
Even if you don’t qualify for NHS or local authority funding, remember that it’s worth checking whether you’re entitled to state benefits such as attendance allowance, personal independence payments, pension credit or Council Tax reductions. While such benefits won’t cover all your care fees, they can make a valuable contribution to your self-funding. Click here to read more about claiming state benefits.