A helpful guide to meeting the soaring cost of care
Britain's ageing population means care costs are rising. The numbers aged 85 or over will increase 60 per cent over the next 20 years, placing a huge strain on local authorities. So because of this, it is a question that Pensioners and their families hope they never have to answer, but each year more and more of our elderly require long-term care. With further questions being, where they can go and what kind of care they can actually afford. Literally thousands of pensioners are being forced to sell their homes to fund their care fees. Here we try and explain why the care system is so challenged and what you and your family can do to help meet these costs.
How is the State care funded today? The State provides basic care for those who are unable to look after themselves. However, it is means-tested by local authorities. Care linked to a severe medical condition, rather than old age or some forms of dementia, is supposed to be free and paid for by the NHS - however this is not always the case. Therefore, all those thousands of elderly people that are entering care every year will have to pay for their own care until changes are made and introduced - this is not expected until at least 2014. Does it matter where I live? In Scotland, personal care within a nursing home is already freely available. In Wales and Northern Ireland, support is slightly different to that of England. Even within England, each local authority has its own priorities and budget constraints, meaning a yet another postcode lottery. Meaning some people get it, some don't. What will I have to pay? Full-time residential care costs from easily £30,000 a year at least, depending on your location, and the quality of home and the medical care that is required. Anyone living in England and Northern Ireland who have assets worth £23,250 or more will pay for their own care. And those with assets between £14,250 and £23,250 receive help on a sliding scale. In Scotland the limits are £22,750 and £14,000. In Wales there is no sliding scale - the State pays for everything once your assets are less than £22,000. These means tests apply whether you need help to stay in your own home or need residential care. Your home is not counted as an asset if a spouse or close relative aged 60 or over lives there. If you live alone and need to move into residential care, the house will come into the equation after your first 12 weeks in care. Local councils, who make the assessments, can also check on gifts made in the years prior to applying for care. This is to prevent older people giving away wealth to beat the means test. Do I have to pay for all the care costs? No. Some benefits such as Attendance Allowance are still paid regardless of your wealth. If you are deemed to require nursing care within a home, there is an extra nursing allowance worth £108.70 a week in England, £71 in Scotland, £120.55 in Wales and £100 in Northern Ireland. Other income, such as from pensions and savings, can also offset the monthly cost of care. How can I meet the costs? An option available is to pay bills from savings and investments or by renting out the home of the person in care. However a property that has been occupied by an elderly person is not always suitable to the rental market. Should the house be sold, the proceeds of the house sale can either be invested to provide extra income or to buy a care annuity, which guarantees to cover fees for the rest of a person's life.