Making decisions about care home fees can be a complex and emotional process. As individuals and their families navigate the challenges of long-term care, it's crucial to have a clear understanding of the logistics, legalities, and financial implications involved.
Here we provide valuable insights into care home fees in the UK, addressing common concerns and offering guidance on financial planning to protect both savings and inheritances. We will explore important topics such as gift giving, asset protection, and the impact of the £86,000 cap on care home costs. Furthermore, we answer some of the most common questions about care home fees in the UK.
Care home fees are the costs associated with residential or nursing care provided by care homes in the UK. These fees cover accommodation, meals, personal care, many activities and sometimes medical support. The amount individuals are required to contribute towards their care home fees depends on various factors, including their financial situation, level of care needed, and whether they require residential or nursing care.
Care home fees in the UK vary according to multiple factors such as the type of care provider, the region and additional extras. A rough guide is around £800 per week for a care home and just over £1000 per week for a nursing home. When you’re looking at care home fees, it’s important to compare like for like, so look at the level of service and accommodation offered.
As care home fees are so high, it’s understandable that many people worry about reducing their estate and want it to go to family or friends over care providers and the tax man. The question of how much money can be given away before entering a nursing home in the UK is a common concern for individuals seeking to protect their assets.
However, it's important to note that deliberately giving away assets or funds to avoid care home fees can have legal implications. Local authorities have the power to investigate and potentially treat such transfers as "deliberate deprivation of assets."
Nonetheless, there are certain circumstances in which gifting may be allowed, such as providing financial support to family members or making reasonable contributions to charitable causes. To ensure compliance with the law, it's advisable to seek professional legal and financial advice.
The amount of savings an individual can retain when entering a nursing home in the UK depends on their financial assessment.
In England, individuals with savings and assets over £23,250 are generally expected to fully fund their care. Those with savings between £14,250 and £23,250 will receive partial support from the local authority, and those with savings below £14,250 may receive financial assistance, although they may still be required to contribute a portion of their income. These thresholds may vary in other parts of the UK, such as Scotland, Wales, and Northern Ireland.
If your care is predominantly for health reasons then you may qualify for NHS funded care.
The amount you pay towards your care should leave you with a Personal Expenses Allowance (PEA) of at least £25.65 per week.
Consulting with a financial advisor or seeking guidance from local authorities can help clarify the specific rules and thresholds in your region.
Protecting an inheritance from care home fees requires careful planning and consideration, often considerably in advance of when the individual actually needs care.
One option is to establish a trust, which can help ring-fence assets and ensure they are used for the intended beneficiaries. However, it's important to seek professional advice when setting up a trust, as there are legal and financial implications to consider.
Another approach is to explore suitable financial products, such as insurance policies or annuities, which can provide a regular income to cover care home costs while preserving the inheritance for future generations. Consulting with a financial planner or solicitor can provide valuable guidance tailored to your specific circumstances.
There has been much talk in the media about the cap on care home costs. Unfortunately, this keeps being moved further down the road and is now set to come into effect in October 2025. This limits the amount anyone in England will have to spend on care home fees to £86,000 in their lifetime. The care cap will apply to costs associated with care and support, but won’t include things such as accommodation, food and energy costs.
There are also other changes alongside the £86,000 cap on care, specifically changes to capital limits. For those with savings and assets between £20,000 and £100,000, means testing will apply and individuals expected to contribute up to 20% per year to their care.
Anything spent on care costs prior to October 2025 won’t count towards the care cap calculations.
As individuals and their families navigate the complexities of care home fees in the UK, it's crucial to approach the process with empathy, knowledge, and a comprehensive understanding of the logistics, legalities, and financial considerations involved. It’s difficult to see life savings dwindle on care costs, but often this is necessary for individuals and loved ones to have the best care.
It’s important to think about care needs and costs a long time in advance in order to protect savings and assets for loved ones as much as possible, while retaining enough to afford care, and stay inside legalities. Seeking professional advice from financial advisors, solicitors, and local authorities can provide valuable guidance tailored to individual circumstances, helping to alleviate concerns and ensure financial well-being.