How To Avoid Selling Your House To Pay For Care

Avoid Selling Your House To Pay For Care

As we age, we may lose the ability to look after ourselves or our homes safely. When this happens, additional support is needed to ensure our health and wellbeing can be maintained. 

There are various care options available for the elderly, including live-in care or residential care, with advanced care homes also available for those with complex medical needs. 

However, the stark reality is that unless the individual qualifies for funding, or has sizable assets they can use to pay for their care, the cost of care can be unaffordable. In some cases, people are required to sell their homes to cover the costs. Understandably, this can be particularly distressing for the individual and their families. 

Thankfully, having to sell your home to pay for care isn’t always a given, even if you don’t have the money in the bank to pay for it. Here are some of the top ways to avoid selling a property to fund care to explain further. 

What Is The Average Cost Of A Care Home Per Week UK?

A good place to determine if you may need to sell your home to fund your care is to know how much care actually costs. 

As you may expect, costs vary depending on where you’re based in the UK, but the average cost of living in a care home is between £600 and £800 per week. Over the course of the year, this amounts to between £31,200 and £41,400. 

How Much Does Live-In Care Cost?

The average cost of live-in care is between £650 and £1,600 per week. The total cost will depend on the intensity and specialism of care required. This is why if cost is a concern to you, and you also don’t qualify for subsidised care, it’s worth exploring whether residential care could provide a suitable option for less money per week. 

See related: Live In Care Guide – How Much Does It Cost?

Do I Need To Sell My Home To Pay For Care?

Not necessarily, although this depends on several factors.

First of all, if any qualifying dependents live in your home, you will not need to sell it to pay for care. Some examples of a qualifying dependant include a spouse, civil partner, a close relative aged over 60, or a relative under the age of 16 who you are legally responsible for. 

Where there are no qualifying dependents, again the question of whether your house will need to be sold to pay for care varies. There are other excluding factors which we’ll cover below, but the main thing to note is that if someone has at least £23,250 in capital (including the value of any property they own) then the NHS states they must pay for their own care. This only applies though if the person will be moving into a care home.

Other Ways To Avoid Selling Your Home

As it’s safe to say that most homes are valued well above £23,250, anyone who doesn’t qualify for funded care may have to self-fund if they don’t have the money to pay for care out of their savings.

However, all is not lost even if that’s the case, especially if you are desperate not to sell your home to pay for your care. 

Equity Release

Equity release is a way of releasing money that’s tied up in your home, without having to sell it to do so. Available to anyone over the age of 55, equity release can be a relief from the stress and burden of trying to sell your home in exchange for funding your care. 

However, seeking independent financial advice is essential, not least as you will be required to pay interest on the money you take out of your home. 

Read more: Using The Equity in Your Home

Deferred Payment Scheme

If you have less than £23,250 in savings, then you can agree for your local council to recover the cost of your care after you have died. What this will involve is the cost of the care being taken from the final sale price of your home.

However, one point to consider is this method could have implications for those who are set to inherit your home, since the value of the estate will likely be vastly reduced. 

Typically you can only use a maximum of between 70% and 80% of the value of your property to pay for care through a deferred payment scheme. It’s essential to get independent financial advice to see whether a deferred scheme is the right option for you, as well as to check whether or not you qualify. 

Letting Out Your Home

Another option to fund your care without selling your home is to let it out. This could involve letting out a single room or the entire property. 

As with any of the other options, there’s a lot to consider before letting out your home. Namely, the property must meet current landlord standards, especially with regards to electrical safety, energy efficiency and insulation, among many other factors. For elderly homeowners who haven’t updated their property for some time, works to upgrade the property to meet these now legal requirements could prove to be too costly to make sense.

Also, the rent must be able to cover the cost of the care home fees, while also bearing in mind any applicable taxes or expenses. 

What If I Run Out Of Money?

For those who are self-funding, once your capital reaches less than £23,250 your local council may be able to assist you with funding. However, you need to request assistance a few months in advance, to avoid your savings falling too low, and to ensure you will be guaranteed a funded place in a care home. 

Free Care Alternatives 

Although a care assessment should be used to determine the appropriate level of care needed, it may be possible to access free support and care from your local council. This is especially the case if your care needs are not as intensive as someone who needs round-the-clock nursing. 

For example, funding for home adaptations or help after returning home from hospital is available for free on the NHS.  

Avoiding Selling Property To Pay For Care: In Summary

Anyone who doesn’t have more than £23,250 will usually not be required to sell their home to pay for residential or live-in care. However, for anyone who does have more than £23,250 in capital, selling your home isn’t a given. You can either choose to self-fund if you have enough savings or use a deferred payment scheme meaning the cost of your care will be recovered after you die. Finally, there is also the option of letting out your property to cover the cost of your care too. 

That said, selling your property may make the most financial sense if you don’t qualify for subsidised care, so it’s important to explore all of the available options. In addition, the earlier you research your care plans, the better when it comes to ensuring your final wishes will be taken into account. 

We hope you’ve found the answers you are looking for in relation to avoiding selling your home to pay for care on Retirement Expert. Let us know your experiences of this topic by leaving us a comment below.

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