Are You Worried About the Cost of Long-Term Care? Here’s What You Need to Know
The cost of care is a major concern for many families. Whether you or a loved one need home care or are considering residential care, understanding how much you’ll pay—and what help is available—is essential. With new government policies set to change how care costs are covered, it’s important to be prepared.
One of the most significant changes is the introduction of a cap on personal care costs. But what does this actually mean for those planning for future care? Let’s break it down.
Understanding the Care Cost Cap
The UK government has introduced an £86,000 cap on personal care costs, meaning that once an individual has paid this amount for personal care, the government will take over funding. This applies to essential care needs such as:
- Washing
- Dressing
- Eating
- Managing health conditions
However, this cap does not cover accommodation, food, utility bills, or additional services within a care home. This means that even after reaching the cap, residents will still need to pay for their living expenses.
When Will the Care Cost Cap Come into Effect?
Originally set for October 2023, the care cost cap has been delayed and is now due to take effect in October 2025. This gives individuals and families more time to understand the financial implications and plan accordingly.
It’s important to note that only payments made from October 2025 onwards will count towards the £86,000 cap. Any care costs incurred before this date will not be included in the total.
What If You Have Savings or Property? Understanding Capital Limits
Alongside the care cost cap, new rules about capital limits will determine how much financial support individuals can receive from their local authority. Here’s how it works:
- Savings and assets below £20,000: The state will fully fund care, though some contributions from income may still be required.
- Savings and assets between £20,000 and £100,000: Individuals will qualify for means-tested support but may need to contribute up to 20% of their assets each year.
- Assets of £100,000 or more: Care will be entirely self-funded until assets drop below this threshold or the £86,000 personal care cap is reached.
This means that many people will need to plan for self-funding their care for a significant period before qualifying for state support.
How Will the Care Cap Work in Practice?
To better understand how these changes will affect real people, here are two examples:
Jim’s Story
Jim has £350,000 in assets and moves into a care home in January 2024. Because the cap does not take effect until October 2025, he will have to pay for all of his care costs until then. After the new system is introduced, his contributions to personal care will start counting towards the £86,000 cap.
Polly’s Story
Polly has £90,000 in savings and moves into a care home in October 2025. Her total care costs are £42,000 per year. Because she falls within the means-tested category, she will receive some financial support from her local authority but will still contribute to her care costs until she reaches the cap.
In both cases, Jim and Polly will need to plan for additional expenses beyond personal care, including accommodation and daily living costs.
How Much Does Care Cost in the UK?
Care costs vary depending on location, level of care required, and whether the care is provided at home or in a residential setting. Here’s a general breakdown:
- Hourly home care: Around £20 per hour
- Live-in care: Between £800 and £1,600 per week
- Residential care:
- Standard care home: Around £700 per week
- Nursing home: Over £850 per week
- Specialist dementia care: Higher fees apply
These figures highlight the need for careful financial planning when considering care options.
What Financial Support Is Available?
For those struggling with care costs, several benefits and funding options may help:
- Attendance Allowance: For those over state pension age who need regular help with personal care.
- Personal Independence Payment (PIP): For individuals under state pension age who require assistance.
- NHS Continuing Healthcare: Covers full costs for individuals with complex medical needs.
- Local authority funding: Available through means-tested assessments.
These benefits are not means-tested, meaning they can provide additional financial support regardless of savings or income.
Do You Have to Sell Your Home to Pay for Care?
Many people worry that they will have to sell their home to afford care, but there are alternatives:
- Equity release: Allows individuals over 55 to access money tied up in their property, though this comes with high-interest rates.
- Renting out the property: Generates income to cover care fees while retaining ownership.
- Deferred payment schemes: Some local councils will cover care costs upfront, with repayment deferred until the property is sold.
Exploring these options with a financial adviser can help families make the best decision for their circumstances.
What Happens If You Run Out of Savings?
If an individual’s savings drop below £23,250, they may qualify for local authority funding. However, it’s important to notify the council at least three months in advance, as support is only provided from the date they are contacted.
Planning Ahead for Care Costs
While the care cost cap is a step towards limiting financial burdens, it is not a complete solution. Families must still plan for ongoing living expenses and potential years of care before the cap is reached.
Taking proactive steps now—such as speaking to a financial adviser, researching available benefits, and considering different care options—can help ensure a secure and stable future.
Home Instead New Forest: Helping Families Navigate Care Costs
At Home Instead New Forest, we understand how challenging it can be to plan for care. Our team provides expert guidance and high-quality home care that enables older adults to remain in familiar surroundings for as long as possible.
If you’re unsure about your options, we’re here to help. Get in touch with Home Instead New Forest today to discuss how we can support you or your loved one with personalised care services that meet your needs and budget.
Contact Us Today
📍 Location: Home Instead New Forest
📞 Call: 01590 637 250
📧 Email: clients@newforest.homeinstead.co.uk
🌍 Website: www.homeinstead.co.uk/new-forest
Planning for care can feel overwhelming, but with the right support and knowledge, you can make informed decisions for the future. Home Instead New Forest is here to help every step of the way.
