5 Tips For Planning Financially For Long Term Care


1. Know the real costs and what you might be able to get state help with.

Before you start speaking to providers of care services it is helpful to have a general understanding of what care usually costs and what parts you can sometimes get for free. Check out our home care costs here. Remember the family solicitor or financial adviser will not always know the answers to this question.

The ‘all care is free’ idea is a myth inadvertently perpetrated by the media and the government which is highly misleading to so many families – indeed this is the number one frustration we encounter when working with families.

Generalising to keep things simple:

Care homes

Cost around £800 – £2000 per week. Care homes vary in price depending on quality and location.  At the higher end would typically be a care home which only accepts self-funding clients and does not sell any of its rooms to local authorities.

The costs associated with care home should be split into 3 categories:
  • The hotel costs (around 70% of the costs). These costs are only paid by the local authority if the resident has assets less than £26,000. As such, these days that does not apply to very many people, particularly if they own their own house.
  • The personal care (around 20% of the costs). In Scotland, these costs are always paid for by the local authority regardless of someone’s wealth. These costs are not paid for in England though, hence the political calls for ‘capping care fees’.
  • The nursing care (10% of the costs). This is paid for through the NHS budget and covers the medical components of care like injections, administration of medications and care aspects requiring fully qualified nurses.

If the state is paying for your care, you will have to accept whatever they provide. If you are self-funding then there is a whole world of options out there. Never let anyone tell you what you can and cannot have when you are paying for it yourself.

Care at Home

Cost around £20 – £30 per hour (depending on need)

The costs associated with care at home is also more easily understood if split into two categories:
  • The personal care (around 25% of the costs). The costs connected to this aspect of care at home can sometimes be reclaimed from the local authority in the form of the direct payment or you can opt for the council to deliver this service to you. Personal care includes help getting washed and dressed and basic medication support.
  • The socialisation, getting out and about and household tasks (75% of the costs). Most often this is the part that family and friends take care of, but for someone who does not have loved ones able to assist in these areas, they may need a lot of support. This area is vital when it comes to caring for those with Dementia.

The costs associated with care at home are so variable as you only need to pay for what you need.

2. Consider using a family solicitor to be appointed to take care of your affairs

Given the serious costs associated with good quality care arrangements, money can start driving a wedge between family members and become a motivator in decisions. Disagreements can also occur if one family member feels they are taking on more of the burden or responsibility for the care of a loved one and its impact on them both emotionally and financially much more than others. It has never ceased to amaze us how so often the challenges of caring for older people can be multiplied by families inability to agree on things and how the elderly client’s wishes. Who should be at the centre of all care arrangements can be sidelined!

As such, people should write out a clear will and requests about how they wish to be cared for as early as possible. The responsibility for actioning this should be placed on a neutral and emotionally detached solicitor who will act only on the requests and in the interest of the elderly client.

3. Be wary of care bonds and insurance policies

In our view, the financial services industry has not yet fully understood and looked to build products that can address the financial implications of care fees in later life. There are some products on the market like long term care insurance policies that guarantee a payout after a period of time and effectively limit the amount you would ever have to pay. But as with all insurance policies, getting them to actually pay out can be a mission. It’s like gambling and we all know the casino always wins. Remember lots of older people don’t need any care or support at all ever. You might not quite feel you got your monies worth out of a policy if you were paying into it for 30 years and never got to claim against it.

We would encourage, where possible, families to invest long term in methods which give them full control over funds and how they are used. The watchword here though is ‘long term’!

4. Be wary of ‘Deprivation of Asset’ schemes

Depriving yourself of assets is when you try to gift your estate to your children in order to make yourself appear below the threshold for statutory assistance for care fees. Some may put all their assets into a trust which is protected from a financial assessment. In our view, such moves are a grave mistake, for two main reasons.

Firstly, if you appear to have no money, your care arrangements will be at the mercy of the state. All choice and control are removed and you certainly will not be able to stay in your own home – you will be sent off to a care home of the councils choosing if your needs determine this.

Secondly, local authorities are wise to these actions. If they think they can prove you have deliberately hidden your assets, they will take you to court and sometimes court cases to recoup fees can rumble on even long after someone has died. Expect this to happen a lot more over the next 30 years. Local councils are having their budgets for social care cut all the time and there is more and more elderly people needed cared for. Given the challenges in social care that are upon us for the foreseeable future, one can sympathize with this approach from local authorities.

5. Consult a specialist elderly affairs financial adviser

If you are serious about long term care planning you need to lay out your entire financial situation on the table and analyse how it will shape up over the next 30 years. This includes every need, wish and want you have – even the bucket list!

You’re not obliged to get professional advice when choosing how to finance your long-term care, but in most cases, it’s crucial to do so.

A specialist care fees adviser is recommended. They have a better understanding of the care sector and the associated costs.

A specialist care fees adviser will help you to compare all your options before deciding which one’s right for you. They will also be able to explain all the costs and risks involved with each product. They should be able to help with other things too, like arranging your will or a power of attorney.  We have built up very good quality working relationships with a small handful of high-quality local professionals.  If you would like a local recommendation on a suitable advisor please get in touch.

5 Common Misunderstandings about Direct Payments


It may be helpful to read our Guide to Accessing Free Personal Care before reading this article.

1. The council has only offered me 6 hours a week so is that all I can get?

Firstly, the council will assess your needs based on how many ‘hours’ of care they think you need. It is from this number of hours that they calculate how much money they will contribute to your care based on their current preset hourly rate. For example, if you have been assessed as needing care twice daily for 30 minutes and the hourly rate is £15, the council will contribute with 7 hours a week or £105. They key word here is contribute! In the majority of cases, you will need to top up to access that actual care package you want.

Once you know how many ‘hours’ you are entitled to it becomes very unhelpful to view the payment in terms of hours of care. Instead, go with the weekly contribution in actual £s. Once you know the weekly amount they will contribute, you can then decide how much care you actually want. Further, you will understand what you can afford with both the council’s money and with your own money to top it up.

It is misleading to think the council will be able to provide enough money to pay for your perfect care package. View the councils’ money as a contribution only from which you can build your own care package on your terms. A helpful rule of thumb is that usually, in the context of a holistic care package put together by a family, the contribution from the council may cover 20-25% of the total cost. You can have as many or as few hours of care as you want, provided you can afford to top up as required with your own money.

2. Can I only use a care provider whose pricing structure is the same as what the council will give me per hour for care services?

No. Despite what you might be told occasionally, you can use any provider you like. You just need to remember that if you choose a provider whose hourly rate is higher than the council rates, (which will likely be the majority of providers these days), you will need to be able to self fund the difference. The principle behind the ‘personalisation’ agenda is all about putting control back to the users of care services. Therefore, you are in control and no one can tell you who to use your direct payments with. The only caveat is that the money is from the public purse and as such you must be able to justify where and how it’s been spent. You should evidence that it has been used for care and support services and not spent on a luxury holiday to the Caribbean!

3. The payments can only be used for personal care.

This is not true. But, you may get differing opinions! In order to answer this question, one must first understand what personal care is and is not. Personal care is helping you to get in and out of bed. It will assist with washing, dressing, and toileting, medication prompts, and very basic meal preparation. It is not for companionship, shopping and errands, housekeeping and extended support, and other matters of general well-being.

The council will often assess a person’s requirements for personal care in blocks to determine their need: ie, bath = 30 minutes, breakfast = 15 minutes, toileting 15 minutes etc. We know life does not work like this. Especially as we age, we like to take our time and if someone is rushing us through personal care tasks, it can become unsettling. It would also do little to help us maintain our sense of independence and control.

Within the context of quality care and quality time, it is not always so easy to break down care arrangements into what is a personal care and what is not. Therefore, it is unhelpful to be prescriptive about whether or not it can only be spent on personal care. We tend to subscribe to the notion that if the support provided is helping to contribute to someone’s well-being and independence at home, then the direct payment is justifiably spent on it.

4. If I want to access direct payments, do I need to become an employer?

No, not at all.  In fact, we would generally recommend against it unless you are in a position and are prepared to take on all the legal and employer responsibilities on yourself. If you use a professional established provider of care services like Bright Care, they carry all the legal responsibilities for the safe and proper management of its staff which in turn serve you.

Some people may choose to use a direct payment to hire someone directly. Setting yourself up as an employer is fraught with difficulties and challenges which often cancel out any potential savings of hiring directly as opposed to using a provider, however, there is free assistance with this process from charities like Lothian Centre for Inclusive Living.

It has been our observation that setting yourself up as an employer may provide a greater sense of control for a younger adult with full capacity who requires a lot of day to day care and assistance in their life. We would take the general view that in terms of care for older people, setting one’s self up as an employer is rarely going to be the best solution with all the added challenges of recruiting and managing staff, staff absences, holiday pay, sick pay and employer liability, the list goes on!

5. Can I nominate the provider but the council will pay them on my behalf?

Yes. Under what is defined as Option 2, they will, but there are caveats! Option 2 is defined by the government as the selection of support by the supported person, the making of arrangements for the provision of it by the local authority on behalf of the supported person and, where it is provided by someone other than the authority, the payment by the local authority of the relevant amount in respect of the cost of that provision.

This statement could be somewhat misleading. Firstly, if you choose a provider whose hourly rates are higher than the amount set by the direct payment, which is increasingly common, the local authority will not pay the full bill. This would leave a top up to be paid. Further, it can get very messy and confusing in terms of knowing what you owe.

Secondly, if you have chosen Option 2, it’s probably because you do not want the hassle associated with paying a private provider. So, if you find yourself being involved in paying a top up, you may as well have opted for ‘Option 1’, in which you are responsible for paying the full bill from the care provider. ‘Option 1’ is defined as ‘the making of a direct payment by the local authority to the supported person for the provision of support’. When pursuing direct payment, generally speaking, we would strongly recommend ‘Option 1’ in connection to getting extra financial support for caring for an elderly loved one.

Bright Care is a family-run business for home care services. We pride ourselves on having the best personal carers in Scotland, so check out our private home care pricing or get in touch.

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