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Home Elderly Care 8 ways to help pay care home fees

8 ways to help pay care home fees

Paying care home fees will likely be one of the biggest considerations when deciding on a possible move into a care home. Average weekly costs range from £750 to over £1000 for specialist nursing care and dementia care services.  We have compiled “8 ways to fund care home fees” to help you save money and make the best decisions about care home funding. 

If you are funding the care home place yourselves there are no easy hacks to save (significant) amounts of money on the fees. But, there are things you might consider to ease the financial burden.  We’ve got 8 ways to help fund care home fees.

1. Know which care

You will likely know what type of home you are looking for from the outset – all of which will be priced differently, residential care home, nursing care home or a home with specialist dementia care.The price will be determined by the level of care required.
home care options
If you are looking for residential care to start it is worth considering future needs, and the likely costs of moving to nursing care, and even dementia care.  At least there will be no surprises should this be necessary.You may like to read more about choosing a care home in our guide here.

2. Research and room rates

When you visit a care home they may offer you a particular room at a specific rate.  A bit like a hotel, there may be other rooms that are less expensive; a smaller room with less of a view or direct access to outside space for example.Your search may start with a care home nearby or one recommended by a friend. Even if your parent or relative has a preferred option, it is worth comparing different care homes. Read their reviews and do your own research particularly in relation to what would make your parent happiest.  Proximity to a local town for example, or perhaps the type of care home – purpose-built or smaller scale  may determine the best solution which may impact the cost.

3. Read the contract small print

Be sure to read the small print of the contract with the care home before you sign.  This should include their policy on fee increases. Particularly important is what is included in the weekly/monthly bill in terms of “extras”.  Hairdressing, outings, GP visits may be additional to the regular fees. 

If you do have to pay for them on top at least you will know in advance and can budget accordingly.  This may also influence your choice of care home from the start.

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4. Negotiating a discount on care home fees

Organisations such as care home finder Lottie could help you save up to £5,000 on care home fees.  This is because they can negotiate on your behalf with care home groups and are able to use their relationships for the benefit of their customers.If you don’t use a care home finder service you can try and negotiate a discount yourself.  Nothing ventured, nothing gained.

5.Benefits and allowances to offset care home fees

Are your parents and relatives claiming all the benefits and allowances that are available to them?  There are ££ billions in unclaimed benefits every year – despite paying taxes for a lifetime some people are reluctant to accept money from the state.  Along with eg the state pension, some benefits are applicable to someone living in a care home. Be sure to check out:

Personal Independence Payment

Personal Independence Payment (PIP) is money for people who have extra care needs or mobility needs. There are two parts: the daily living component, and the mobility component. Your parent may qualify for one or both of them. (PIP has replaced Disability Living Allowance (DLA) for people aged over 16).

If your parents/you are responsible for paying the care home fees your parent can continue to claim the PIP daily living component, currently £61.85 (22/23) per week (or the DLA equivalent). (In Scotland called the Adult Disability Payment living component).

This benefit would provide almost £250 per month to offset against the care home fees.

Attendance allowance

Anyone aged over 65 can claim Attendance Allowance if they have needed help with daily tasks and some care for at least 6 months prior to application. (If someone is terminally the claim can be made straightaway).  Attendance Allowance is paid at two different rates, Standard rate of £61.85 and enhanced rate £92.40 (2022/23), and how much depends on the level of care needed.  The standard rate can be claimed if your relative moves into a care home.

This benefit would provide almost £250 per month to offset against the care home fees.

It is important to note the it is unlikely someone will be able to claim both PIP and Attendance Allowance; one will probably discount the other.

6. Other funding solutions

There are options to help fund care home fees beyond draining the current account.  Take financial advice from a Society of Later Life Advisors (SOLLA) accredited financial adviser, but considerations could include:

Immediate needs annuity – is an insurance product that can be bought by self-funders who are set to receive long term care. In exchange for a lump sum payment to an insurance company, the buyer is guaranteed to receive regular payments for the care that they need, for the rest of their life.

8 ways to fund care home fees

Equity Release – is a way of accessing the money that is stored in the value of the primary home, without having to sell up and move out.  The most common type of Equity Release is a Lifetime Mortgage. As with a traditional mortgage, a Lifetime Mortgage is a loan against the value of the property. The older the homeowner is and the greater the value of the property, the larger the sum that can be borrowed. There is no time limit or end date to the loan, which is only repaid when the property is sold, following the death or move in to care of the last borrower.

Find out about your equity release options from John Lamb Hill Oldridge 

Deferred payment agreement – is an arrangement with the local authority that lets people use the value of their homes to help pay care home costs. If eligible, the council will help to pay care home bills on behalf of your parent. Repayments to the council can be delayed until the home is sold, or after the death of your parent.

7. NHS Continuing Care for all care home fees

Arguably the holy grail of care home funding, NHS Continuing Care is when the NHS pays for all the care costs for someone whether they are at home or in a care home. 

It is based on having specific “primary healthcare needs” which will be assessed in order to qualify.  A diagnosis of for example, Dementia, will not in itself qualify someone for NHS Continuing Care. 

NHS Continuing Care

Notoriously difficult to get, something of a postcode lottery, but it should certainly be a consideration in situations when someone has complex and ongoing healthcare needs.

8. Funding social care options

From October 2023 the Govt.’s new legislation for funding health and social care is scheduled to be implemented.  From then anyone whose assets drop below £100,000 will be able to receive local authority funding towards their care home costs.  In addition, the new care cap comes in.  Ostensibly it should mean that no-one will pay more than £86,000 towards their own care.  

health and social care funding

The reality is somewhat different as the figure only applies to “board and lodging” elements and not the care which may be required.  There are also other costs that will continue to be charged to self-funders.  However, it should mean that open-ended care fees for families concerned about funding a care home place long-term should ease.  Once the £86k is reached, then the local authority will step in to pay. 

We are not suggesting putting off a care home move until then, to risk the health and well-being of a loved one. However, it may give you a timeframe to consider for the next year if other options such as more home care or live-in care are a consideration for this time.

Our guide to the new Health and Social care funding solutions unravels the complex plans. 

Plan Ahead

The very best advice is to try and plan ahead should you feel that paying for a care home may become an option.   Our comprehensive finance section gives you more information.