Financial planning for moving into a care home

When it’s time to consider a move to a care home, you may find yourself juggling many emotions. For example, it is natural to be concerned about the future and hope for the right support, while having questions about how to make it all work financially.  

You want to find the right balance of quality care, comfort, and a place that feels like home, but you may also be thinking, can we afford this? The good news is, with careful planning and the right guidance, you can take control of the financial side of this decision. 

Care home costs encompass more than just accommodation; they also include fees for personal care, nursing support, and optional services, which can quickly add up. Without proper planning, these expenses can deplete savings and impact long-term financial security. By taking the time to understand care home fees and available funding options, you can make informed decisions and secure the right level of care without compromising financial wellbeing. 

This guide is written with you in mind, offering practical advice and compassionate guidance. Our aim is to make the financial planning process feel less intimidating, helping you focus on what matters most—finding a care home that feels like the right fit for you or your loved one.

Understanding care home costs

Understanding the costs involved can take a huge weight off your mind before you begin moving into a care home. If you have never interacted with carers or the social care industry before, all of this can seem like a daunting process. Knowing what is and is not typically included in the cost you pay to a care home can sometimes be confusing. We aim to demystify all of these considerations in the section below.

Breakdown of costs

Of course every care home is different, some are all inclusive, while others may not be. However, regardless of the individual policies, there are some fees which are important to understand, no matter which facility you are moving into. The following costs will typically apply regardless of the care home you move into.

Accommodation fees

These form the foundation of care home expenses, covering your room, meals, and utilities. Accommodation costs vary depending on the type of room (private or shared), the care home’s location, and the quality of facilities provided. Premium care homes may charge more for additional comforts, such as ensuite rooms or scenic views.

Personal care and nursing fees

The level of care required significantly impacts the overall cost. Personal care fees cover daily support with tasks such as bathing, dressing, and eating. If you or your loved one requires medical or nursing care, these services will add to the fees. Homes offering specialised care, such as dementia support, typically have higher rates.

Additional services

Beyond essential care, many care homes provide optional services that enhance residents’ quality of life. These may include recreational activities, hairdressing, transportation for outings, and personal entertainment options. While these extras are often beneficial, they can add up, so it’s important to review what’s included in the base cost versus optional add-ons.

Regional variations

Care home costs can vary widely across the UK, influenced by factors such as property values, local demand, and staffing costs. For example, care homes in London and the South East often have higher fees compared to those in the North of England or rural areas. Understanding these regional differences can help you evaluate care options within your budget while considering location preferences.

Toiletries and personal items

Residents are usually expected to provide their own toiletries, such as soap, shampoo, toothpaste, and other personal care items. These recurring expenses may seem small individually but can add up over time. Some care homes may also charge extra for supplying these items if residents prefer not to bring their own.

Alcohol

While many care homes allow residents to enjoy alcohol in moderation, this is typically an out-of-pocket expense. Whether it’s a glass of wine with dinner or a bottle of spirits for special occasions, it’s worth factoring these costs into your monthly budget if this is a priority for you or your loved one.

For more information on potential care home costs, check out our blog, ‘Care home costs and fees.’

Assessing your financial situation

Before moving into a care home, it’s crucial to evaluate your financial situation to determine how the costs will be managed. This process involves a clear understanding of your assets, income, and potential eligibility for financial support.

Savings and assets

Your savings and assets will play a central role in funding care home fees. Start by evaluating your liquid assets, such as cash, savings accounts, and investments, which can be easily accessed for immediate needs. Also, consider non-liquid assets like property or valuable possessions, which may require time or strategic planning to convert into funds. Understanding the total value of your assets will help you determine how long you can self-fund and when you might need additional support.

Income streams

Next, review your regular income sources. These may include:

• Pensions: State, workplace, or private pensions.
• Benefits: Attendance Allowance, Pension Credit, or other government assistance designed for elderly care.
• Other income: Rental income, annuities, or dividends from investments.
  Combining your income streams with your savings will give you a clearer picture of your financial standing and how to allocate resources effectively.

Exploring funding options

Once you have assessed your finances, it’s time to explore the various funding options available for care home fees. Whether you are self-funding or eligible for support, understanding these options can help you make informed decisions.

Self-funding

If you do not qualify for financial assistance, you may need to rely on personal resources, such as:

• Savings and investments: These provide immediate access to funds but may deplete over time.
• Selling property: Many individuals use proceeds from selling their homes to cover long-term care costs. However, this can be an emotional and significant decision.
• Drawbacks and considerations: Self-funding offers control over care choices but requires careful planning to ensure your funds last. Consulting a financial adviser can help create a sustainable plan.

Eligibility for financial support

• Local councils provide means-tested financial support for individuals who cannot fully cover care home costs. This assessment considers your income, savings, and assets to determine whether you qualify for assistance. In England, for example, if your assets are below £23,250, you may be eligible for some level of support. However, you may still be required to contribute from your income, and some care homes may charge additional fees beyond what the council covers.

NHS Continuing Healthcare

• For individuals with complex, ongoing health needs, the NHS may fully fund care home fees through its Continuing Healthcare (CHC) programme. This is not means-tested but is based on health criteria. Eligibility is determined through an assessment of your medical needs, focusing on their severity, unpredictability, and impact on daily life.

Equity release

If you own property but prefer not to sell it immediately, equity release allows you to unlock funds from your home while retaining ownership.

• Pros: Provides access to cash without needing to move.
• Cons: Reduces the value of your estate and may affect inheritance plans.
  Equity release schemes require careful consideration and professional advice to ensure they align with your long-term goals.

Deferred payment schemes

Some local councils offer deferred payment schemes, allowing you to delay care home costs by using your home as security. This means you won’t need to sell your property immediately, and the fees are repaid later, often after the property is sold.

• Who can benefit: Individuals with limited liquid assets but substantial property value.
• Key considerations: Interest may accrue, and not all councils offer this scheme, so it’s essential to confirm availability.

By exploring these funding options, you can make well-informed choices tailored to your financial situation and personal preferences, ensuring a smooth transition into care home living.

Tips for reducing care home costs

Finding the right care home while staying within your budget can seem like a tall order, but there are several ways to manage costs without compromising on quality. With the right tools and approach, you can make informed decisions that ensure the best possible care for yourself or a loved one.

Negotiating fees

Many people are unaware that care home fees can sometimes be negotiable. Don’t hesitate to:

• Ask about discounts: Some care homes offer reduced rates for long-term residents or during quieter periods when occupancy is lower.
• Explore bundled packages: Ask if services like personal care, laundry, and meals can be bundled at a lower overall cost.

A polite conversation with care home managers can often reveal opportunities to save money.

Autumna offers an additional service aimed at helping care seekers to negotiate fees. Check out our impartial advice here.

Comparison shopping

Care home fees can vary significantly depending on the location, services offered, and facilities available. Spend time comparing care homes in your area to identify those that meet your needs without exceeding your budget.

• Research homes in different regions, as costs in urban areas like London are often higher than in more rural locations.
• Look for care homes offering all-inclusive packages to avoid unexpected expenses.

Use online care directories to compare costs

One of the most effective ways to start is by using online care directories like Autumna.

How It Works:
Simply enter your location into Autumna’s search bar to access a tailored list of care homes in your area. From there, you can refine your search using four helpful filters:

• Care type: Specify the level of care required, from residential care to specialised nursing care.
• Price: Use the price tab to search for care homes within your budget. You can even set a specific range to avoid going over your financial limits.
• Additional filters: Narrow down by preferences like facilities, care home ratings, or types of care offered.

Sort by weekly fees:
Once you’ve filtered your results, Autumna allows you to sort care homes by their weekly fees. This feature can be invaluable for creating a clear financial plan, ensuring that you’re not surprised by hidden costs.

Using platforms like Autumna not only simplifies the process but also empowers you to make confident, well-informed decisions. Our shortlisting tool allows you to answer a few quick questions and receive a tailored list of care homes that can meet your requirements.

Looking for care homes in your area?

For additional help and support, contact our knowledgeable and welcoming advisors on 01892 335 330.