Live in care
funding options

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If you’re considering live-in care for your loved one, you’ll likely be thinking about the funding options. The funding model for care is often a popular topic of conversation in the news. It can be a source of stress to family members and friends looking to make arrangements for such care. 

The good news is that there are many options and, sometimes, more options than it might at first seem. Here we will run through the different options and help point you in the right direction.

Self funding live in care

The first form of funding option to consider is self-funding. It could come from savings or from liquidating assets. Self-funding won’t, of course, be possible or desirable for everybody. A lack of funds or savings may stand in the way for some. 

If self-funding is possible, then it can, in some cases, take the burden off your loved one’s shoulders. It can mean that there is no need to rely on other sources, alleviating a lot of stress. It can also often mean the administration involved in setting up the live-in care is lessened. However, it also means that the cost of live-in care falls entirely on the individual receiving the care, and they may need to be confident that they can afford to continue it for potentially a long time.

Equity release to fund live in care

Equity release is another option for those looking for a way to fund live-in care as they get older. Equity release involves arranging with a lender to remain in your home while also accessing some of its value in cash. In return, the “amount” of the property’s value that you own is reduced so that you will have less to pass on to loved ones after your death. 

This option is appealing to those who are living in a valuable property but are unable to use that value for their care without selling. In an environment of increasing property values, more and more people are finding that their home is their best and most valuable asset, and equity release is popular for that reason. However, equity release is not necessarily a perfect solution. There are many different types, and the long-term consequences can be problematic either for your loved one or for beneficiaries. As a result, it’s well worth investigating the option with an independent financial advisor and seeing if it suits your specific circumstances. 

Read more about equity release

Local authority funding live in care

Seeking funding

Most people thinking about how they might fund their care or the care of a loved one will consider local authority funding at one stage or another. It makes sense as local authorities have a budget to help care for people in their communities, and it’s vital to check out if you’re eligible so that you can help pay for the care you deserve. 

However, there’s a relatively low level of knowledge about local authority funding for care. News stories exploring the so-called care crisis can leave people feeling as though they don’t know what they might be able to receive from their local authorities. Luckily, there’s a tried and tested process that people seeking this sort of funding can use.

First steps

The first step is to work out what you or your loved one might be eligible for. The eligibility system at many local authorities has two strands, and getting your head around it early can help make later decisions more straightforward and streamlined. The first strand focuses on the care need of your loved one. For example, if their care needs are very high, they could be prioritised by the local authority.

Second strand

The second strand focuses on your loved one’s financial situation. If your loved one has substantial independent financial means, it might be the case that they will not receive care funding because they will fail a “means test”. If they plan to stay in their home, the value of their home could, in some cases, be excluded from the assessment of how much wealth your loved one has, although that isn’t set in stone. 

Contacting your authority

Each local authority makes its own decisions on this front and decides which care cases they will prioritise and which they won’t, so there’s no way to predict whether the local authority in your area will move in a particular direction. For that reason, you should get in touch with your local authority as quickly as possible so that you can speak to someone in the social services or social care department. You might find that your local authority pays for all, some, or none of your loved one’s care, and you may have to investigate a hybrid model. 

Direct payments

Finally, don’t forget that many local authorities now pay for care costs based on what is known as “direct payments”. Instead of the local authority paying the care provider on your behalf, the direct payment system allows you to receive the money to find the care provider and spend it that way, a bit like a voucher. This can be ideal as it can allow you to look for a care provider that is right for your loved one based on your knowledge of what they need and prefer. 

Read more about local authority funding

Getting advice about funding live in care

Now that you’ve thought about the various options for funding live-in care, it’s time to get some specialist advice. It could well be worth speaking to an independent financial advisor. Such a professional would take a holistic look at your loved one’s finances and work out where they might be able to earmark money to spend on live-in care.

Getting advice about funding live in care

Now that you’ve thought about the various options for funding live-in care, it’s time to get some specialist advice. It could well be worth speaking to an independent financial advisor. Such a professional would take a holistic look at your loved one’s finances and work out where they might be able to earmark money to spend on live-in care.

It’s essential to ensure you source this independent financial advisor yourself. Some financial products that also act as funding sources for live-in care, such as equity release, can be complex, and it’s crucial that you don’t accept the recommended financial advisor suggested by the provider, as they may not have your loved one’s best financial interests at heart. Speaking to an independent advisor may cost upfront, but it could save you money when the right decisions are made.

Ultimately, the funding option you and your loved one might decide upon will depend on their financial circumstances. Equity release, for example, may work for some, while turning to sources of other financial support might work well for others. Meanwhile, for those who can self-fund, paying from savings could make sense. It’s important to get expert advice on which method might be best for your circumstances.

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