Whether you are an elderly person, or know an elderly person that is close to your heart, care home costs might be a major concern of yours. There’s no question at all that these costs are nothing to blow your nose at, and they pile up very high very fast. It’s a huge expense for most people, and yet one that you can’t really go without. So how do you go about affording such a thing? It’s not always easy, but it’s definitely possible.

Care home costs can be paid for in a number of ways. You will have to go about in the way that best fits you, your family, and your budget. If you are the elderly person that needs help in affording the costs, then you have ways open up to you, and the same is true if you are the relative of the senior in need. Whether it is you, your parents, or your other relatives who need the home care, then you can find good ways to afford the costs.

The first and most important thing to do is to foresee the upcoming care home costs and prepare for them. Most people wait far too long before they start considering something like this, and for that reason they find it much harder affording it. If you want your retirement to go well and your home care to be affordable, then think about these things when you are younger and have more flexibility in your budget. Invest early on in life, and those investments will pay off in the future.

But most people only have so many savings or investments waiting for them at the end of their lives, and what happens if that just isn’t enough? You will obviously have to look at other solutions to the problem, and that’s not always easy. There are options out there, but sometimes they require sacrifices in other areas of your life.

If you only have a limited amount of savings left, then there are programs and government services that will pay for all or pay of your costs. If you have an extremely low budget with limited income then those programs will usually step in to help, so long as you get in contact with them and go through the processing. These programs can be a great way to cover the costs.

There is also the option of reversing the mortgage on your house so that you get back some of the money you put into it. This is one way to get quick and easy money, as your house is a form of investment that you made years ago. This option only works if you and your family agree to it, and if you aren’t counting on leaving the house as an inheritance for anyone.

Affording care home costs isn’t impossible, and it’s something that almost everyone will have to do at some point in their lives. If you want to ensure that you or the person you love gets the care they need, then start thinking about your options as soon as possible.

In the United Kingdom there are two main types of care home. All homes provide accommodation and help with personal care, but some also provide professional nursing care. Until a few years ago these were called residential homes and nursing homes. Nowadays the official names are care homes, and care homes with nursing, but some homes may continue to use the older names. This long term care UK article explains some of the issues which might be faced by an elderly person, and their family, if they need to go into a care home.

The charities Age Concern, and Help the Aged, combined forces recently to form a new charity, Age UK. Age UK have produced a number of fact-sheets covering the issues about care homes. Elderly people, and their carers, will need to consider a number of issues, including whether moving into a care home is actually the right solution, whether there is financial support available to pay for care, and how to choose the right care home.

The decision to move into a care home should really be made by the elderly person themselves, although family, friends, social workers and medical professional will all wish to support them in making the right choice.

There may be a number of alternative options to a care home. These might include moving into sheltered accommodation, or extra help to stay in the original home. Respite care is a system for giving the elderly person and their carer a short break.

In the UK it is the local council’s responsibility to assess the help an elderly person needs to stay in their own home. There may often be eligibility for benefits such as Disability Living Allowance (DLA) and Attendance Allowance (AA).

If the elderly person is not able to stay in their own home, then sheltered housing (or retirement housing) may provide an alternative to a care home. Retirement housing is designed specifically for older people, usually those over the age of 60. It is often arranged in schemes of up to about 40 self contained units, usually flats or bungalows.

Most retirement housing schemes have alarm systems and a resident manager or warden. The warden will almost always be able to help in emergencies. He does not carry out personal services such as cooking, cleaning or nursing, but he can often help arrange for those services if they are needed. There may often be shared communal facilities such as a lounge and a large shared garden.

One specialized type of retirement home is called extra care sheltered housing. This is appropriate for elderly people who need help with personal care, such as help bathing or dressing. Accommodation is still likely to be in self-contained flats, but there might be a communal dining room, which would not be normal in ordinary sheltered housing. This type of housing is often run in conjunction with a local council’s social services department, and placement in this type of home would usually be the result of a care assessment from social services.

In the UK there are reported to be around 70,000 people that have to sell thier homes to help fund the cost of long term care.

Partnership Assurance did some research recently and found that 76% of the over 50s surveyed were completely unaware of the different financial products available to help them with the cost of long-term care, although surprisingly 53% would sell their home to finance their care fees (Partnership Assurance, June 2010).

Sometimes the need for care is know about and in some cases it is unexpected. The person that requires care may have had a stroke or an accident and the family were not prepared for the event.

The UK long term care system is very complicated and it is best to work in conjunction with specialist advisers that understand the process that needs to be followed. Legal advisers can make sure you claim all the benefits you can and financial advisers can help you put the right financial plan in place to pay for the care fees, this quite often is done via a care fees annuity. Everybody’s circumstances are different and the financial adviser will look at your individual needs. The biggest question that most people ask is, “what will happen to the family home?”

Do I have to sell my home?
You won’t necessarily have to sell your family home to fund your long-term care. If your spouse or partner still lives in the home then it will not be taken into account as part of the local authority’s financial assessment.

The time when an elderly person needs to go into residential care is often a huge strain on family members. Illness or infirmity may have forced a sudden change in circumstances and time may be short.

Under the Community Care Act 1990, local councils have the right, by law, to force the sale of a family home to pay for care costs or to take a charge against a property to be repaid on the eventual sale of the home. This could result in very little being left for the surviving family.

You and your spouse or civil partner should each make a provision in your Wills ensuring that, upon the first death, the deceased’s half of the property is placed in trust for your children or other beneficiaries instead of passing directly to the survivor. However, you need to understand the powers that local authorities have to include in the means testing assessment assets that they consider have been subject to ‘deliberate deprivation’. This occurs when a resident transfers an asset out of their possession in order to achieve a better position that enables them to obtain assistance.

A trust arrangement keeps any designated property owned by the deceased away from the council’s reach.

At the same time it allows the surviving spouse or civil partner to continue benefiting from the assets, which may include the family home. On the death of the remaining member of the couple, the assets owned by the trust, together with whatever is left of the assets of the second spouse or civil partner, can be given to the surviving family.

The majority of people own their homes jointly which means that, on first death, the survivor would then own 100 per cent of the full property value. By changing the way you own your home to what is known as ‘Tenants In Common’, combined with the appropriate trust planning, this could effectively ensure that your property is fully protected should either of you enter into care. In addition, by changing the way your assets are invested and held, this could also ensure that your cash or liquid assets are fully protected from future long-term care costs.

Source: Retirement Solutions Limited and www.goldminepublishing.com

Welcome to Care Fees Annuity