How to Pay for Care Without the Need to Sell your Home

When you learn that you need long term care, many of the questions that quickly arise revolve around how you will pay for it. You for through the assessment process to determine what kind of care you need and you verify that you do in fact need long term care and may even learn that you need some nursing care or help with personal day to day activities. So now you know that you need care but still have yet to determine how you will pay for that needed care. Your local authority will carry out a means test that will take into account the value of any savings or investment (but exclude insurance bonds with an element of life protection), your pension income and income from other sources and your other assets which include the value of your home. This is to determine exactly what financial assistance you may qualify for and what the local authority feels like you can comfortably contribute to the expense of your care. There are some exceptions when it comes to your home being included in your means assessment or even all of your liquid assets. Most of these exceptions apply to married partners when only one in the partnership needs long term care. For example, if you are married and some of your income is required to support the daily lifestyle of your spouse, that income may be excluded. If your property is where your spouse will continue to reside, that be excluded from your assessment again. However, those exclusions rely very heavily on your means test and the determination of your local authority.

Because many of those needing care are short on liquid assets they often feel that they are left with no option but to sell their home in order to pay for their care. This makes them feel like they have few options with which to work when they are trying to fund their care. No one really looks forward to receiving their care in a different residential setting than that which is provided by their home. People are most comfortable in their home and will typically leave their residence only as a matter of last resort. If possible most elderly people would prefer to remain in their own home and receive the care that they need in familiar surroundings. It allows the individual to age with dignity and independence which is how most people would just to enter long term care if at all possible. There are ways to ensure that long term care can be funded while also staying in your home. Again, not every solution works for every individual but there certainly are a number of consumers who receive their care right at home. They do so comfortably in their familiar surroundings and they find that they don’t ever have to sell their home in order to afford their care.

One solution to you funding this type of care would be to release equity from your property. This allows an avoidance of selling the home outright. However, it is important to receive specialist advice on the range of products that are available. There are some benefits to this funding stream, however, the biggest of which is that these schemes can allow you to release a percentage of equity without the need to make regular monthly repayments. With recent product developments you would have the choice of taking a small initial lump sum and have a reserve facility to be able to draw down additional funds as they are required to cover the ongoing costs of your care. Using this scheme, you would have some bank of money reserved should you need to use it. The drawdown facility means that you only start to have a roll up of interest once the capital is drawn. Alternatively, it is possible to have a lump sum taken at the start with which you may consider the purchase of a Long Term Care Plan. This is a form of enhanced annuity which is guaranteed to pay you an income for the rest of your life to cover the cost of your care.

Whether a lump sum or draw down scheme is recommended for your needs no repayments are required as the interest will roll up and be paid back together with the original loan. This payback takes place following the sale of the property either after your death or after the abandonment of the home. It can also take place if you decide to move to a residential care home on a permanent basis.