UK Care Home & Nursing Home Costs: Key Questions Answered

Wednesday 3 July, 2024

Care fees (also known as nursing home fees) in the UK are something you should carefully consider, especially since the weekly cost of a care facility can exceed £1,500. 

The type of care you require and your location in the UK determine how much care homes cost. According to studies, the average annual cost of a residential care home ranges from £27,000 to £39,000. If nursing care is required, the annual cost rises to between £35,000 and £55,000.

Allan Ross, an accredited financial adviser for Later Life at Lonsdale in Ware, answers some of the most frequently asked questions regarding care home costs in the UK:

Will I have to pay for my nursing home costs?

A means test known as a Care Needs Assessment will determine your ability to pay for care. Read more about it how to get a Care Needs Assessment. In essence, if you're arranging live-in care and support at home, your property will not be included in the means test. It might also be excluded if you share a home with a partner, child, or a relative who is disabled or over the age of 60. In such cases, you won't need to sell your home, and you might even receive some assistance. Even when not disregarded, selling the property won't always be necessary but the value will be taken into account in the financial means test. The threshold after which you are responsible for covering the cost of your care home charges is £23,250. If you are paying your fees, this is known as self-funding. If your capital exceeds this threshold, you will likely need to finance your care fees. If your capital is below this level, you may have to contribute from your income (including a tariff income if capital is over £14,250).

What alternatives are there to a care home?

More people needing assistance are now considering Live-in Care and personal care services as alternatives to care homes. It is often more cost-effective and provides one-to-one personal care support, which is important for many families. The costs are also more manageable as you are responsible for providing accommodation for the carer, typically in the care recipient's home.

How much do live-in carers cost?

Costs vary depending on factors such as the level of care required, location, chosen provider, and specific needs of the individual. In the UK, the average cost of a live-in home carer ranges from £650 to £1,500 per week, covering their salary, accommodation, meals, and administrative expenses. Additional fees may apply for specialised services such as dementia care or round-the-clock support.

Researching and comparing different care agencies is important, taking into account both the individual's needs and budget. Benefits such as Attendance Allowance or Personal Independence Payment can help offset home care costs. Consulting with a financial advisor or local authorities can provide further guidance on available assistance.

Can I get financial help towards the cost of my nursing home fees?

Financial support eligibility depends on your wealth. If you live in England and have savings exceeding £23,250, you are responsible for funding your care (self-funding). The cost of residential care is means-tested through a care needs assessment, meaning higher financial resources may reduce potential support from a social care budget.

However, individuals with significant ongoing care needs may still qualify for NHS continuing healthcare, which can cover all care costs irrespective of means test results. This support requires a primary health need assessment. For dementia care, NHS funding may not be considered a primary need, requiring self-funding that typically exceeds standard nursing home fees by about 20%.

Before you move into a care home, your local council will undertake a care needs and financial assessment, considering your income, savings, and property to determine your contribution towards care costs.

What is included in care home fees?

The cost of a nursing home may vary dramatically based on the type and level of care required. Typically, these expenses may include accommodation, meals, laundry services, and other amenities, in addition to fees for personal care services such as assistance with dressing, bathing, eating, and mobility assistance. Additional fees may apply for non-standard care home services, such as specialised medical or nursing care. When choosing a nursing home, it is important to confirm exactly what is included in the price. Residential care facility representatives must provide a detailed summary of all fees associated with residence at the facility.

Watch out for hidden fees…

These could include telephone installation or premium TV packages that are not included in the standard price. These charges should be made explicit from the outset so that there are no unanticipated expenses once you have moved into the care facility. In rare instances, financial assistance may be provided to help with the payment of UK nursing home bills. Local councils can perform care cost evaluations to determine what amount of support a person needs and how much they or their family can contribute to their care costs.

Additionally, those over the age of 60 may be eligible for Attendance Allowance, which assists with the expense of personal care in residential facilities. When choosing a facility, it is essential to understand the expenses associated with the care home so that you are not surprised by unexpected charges in the future. Conducting thorough research is essential.

Will NHS Continuing Healthcare pay for my costs?

NHS Continuing Healthcare (CHC) is a package of care provided by the NHS to those with ongoing healthcare needs as a result of a disability, disease, or accident. This may involve physical and/or mental health requirements, as well as complex social and nursing care demands. Adults of any age may receive CHC at home or in a nursing facility. Eligibility depends on an individual’s evaluated needs and the Primary Care Trust's established eligibility criteria (PCT).

To access CHC funding, you must meet the eligibility requirements of your PCT. If you believe you qualify, you should contact your primary care doctor or local PCT, who will assess your eligibility and advise you on the available funding. If you qualify, there is financial assistance for care expenses and other related services such as access to hospital care, respite stays, and homecare services.

It's important to note that CHC funding doesn't cover all healthcare costs. If additional support is required, exploring private health insurance and other funding sources is advisable. For those needing long-term care and support, NHS Continuing Healthcare can be invaluable.

How much will the council pay towards a care home?

The amount of money that a local council will pay towards care home fees depends on each person’s circumstances. If you have assets or savings over the current UK threshold of £23,250, you may be expected to contribute to your care costs. Local authorities have different policies in place for funding long-term care homes, which will vary depending on where you live. Generally speaking, your local authority should provide some assistance with paying for residential or nursing home care, although they do not necessarily have to cover the entire cost.

Councils assess applications for funding using a “means test”. This looks at your income and assets and any other financial help you might receive. It also considers how much care you need and the type of care home you will be living in. If you have more than £23,250 in savings and assets (excluding your house), then it is likely that you will not qualify for any local authority assistance. The amount the council will pay towards care home fees also depends on the home’s cost. Every local authority has different limits on what they can contribute, so if the cost of your chosen home is above this limit, then there may be an additional bill to cover the difference.

What is the savings threshold for care home fees?

There is a personal savings threshold for care home fees in the UK. If you live in either England or Northern Ireland and have capital valued at less than £14,250 you will be entitled to maximum financial help and support. In effect, this means full local authority funding. Anyone receiving full local authority funding will have to contribute all of their income (including benefits, which they must claim) to the local council, except for the personal expense allowance. If you have between £14,250 and £23,250 in capital, you have to pay towards your fees. This is £1 for every £250 of your savings between £14,250 and £23,250 and is known as ‘tariff income‘. You will also need to contribute all of your income towards the fees, except for the personal expenses allowance. If you have capital of more than the savings threshold then you will need to use that capital to pay the full cost of the care you need.

Does the savings threshold for care fees differ depending on where I live in the UK?

Yes, it does. The threshold in England is £23,250, in Wales £24,000 for home care or £50,000 for care homes, Scotland £28,000 and Northern Ireland £23,250.

What savings count towards the £23,250 when assessing the costs of care homes?

  • The value of your property, although this is excluded if your partner, a close relative, or any young dependents live there.
  • The value of any private and state pensions.
  • The value of your savings, as well as any interest you earn from those savings.
  • Some benefits like Pension Credit, Attendance Allowance, or the care component of Disability Living Allowance.

What if I have savings greater than £23,250?

If you have been assessed as having more in savings than the £23,250 threshold, then you will be responsible for paying for the care you need.  You will be classed as a self-funder and will be expected to pay for the full cost of your care from your savings and assets. However, there are some alternative ways of meeting your care costs. For example, you might consider equity release, an immediate care annuity, or NHS Continuing Healthcare Funding. 

What happens if I give away my assets so I have less than £23,250?

If you give away some of your assets as a gift, say to your children, and then look to claim assistance from your local council, they may well say that you have done this deliberately to avoid paying for your care costs. This is called ‘self-deprivation of assets’ and the local council may undertake your means test including the value of assets that you gave away. Consequently, you may be expected to pay more for the cost of care than you can afford if you try to intentionally reduce your assets.

This is a complicated area but doesn’t mean you cannot pass what you have to family and friends, as long as you do so while you are still fit and healthy and cannot reasonably be expected to know that you will have to pay for your care soon. There is no limit to how far back the council can look when conducting your means test.

Do you need advice on care home and nursing costs?

For more personalised advice and support regarding care home costs and funding options, please contact Allan Ross, an accredited financial adviser for Later Life at Lonsdale in Ware. With extensive experience in helping families navigate the complexities of care funding, Allan can provide tailored guidance to help you make informed decisions.

Contact Allan Ross today to discuss:

  • Understanding your eligibility for financial assistance
  • Evaluating your assets and potential funding sources
  • Planning for future care needs

Get in touch with Allan Ross:

Take the first step towards securing the right care for yourself or your loved ones. Contact Allan Ross today for expert advice and peace of mind.

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