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How to pay care home fees

Cherry Reynard
Written By:
Cherry Reynard
Posted:
Updated:
27/07/2017

Putting a relative into care is never an easy decision, but these steps should minimise the financial impact.

Use all of the available allowances

There are a range of allowances available to individuals to support them in care, including an attendance allowance, personal expense allowance and registered nursing care contribution. Check whether a relative may be entitled to any of these allowances.

Maximise an individual’s assets

Individuals may have state and employment pensions, income from investments and other savings. It may be that investments can be redeployed to generate a higher level of income. It may also be possible to let out all or part of the family home to prevent it being sold.

Specific products

Immediate care plans (also known as immediate needs annuities) operate like conventional annuities – a one-off lump sum buys an income stream for life. The difference is that these plans are specifically for long-term care and are tax-free if paid directly to a care provider. They may also have flexibility if an individual moves out of care for any reason. It may also be possible to use schemes such as equity release to use the capital in the family home.

Challenge care cost rises

Groups such as Valuing Care have a track record of negotiating better rates on behalf of its clients. Also, there have been reports of individuals successfully challenging rising care costs based on individual needs.

Get a Power of Attorney

If people have reached the point of needing long-term care, they are often not in a position to manage their own finances successfully. A Power of Attorney allows someone to make decisions on an individual’s behalf and should be in place well before it is likely to be needed.