Guide to Funding Your Own Care

Failing to qualify for council or NHS continuing care funding is not the end of the world. Despite what some people think, it is still possible to fund your own care. 

Don’t Rely on Savings

The worst method of funding care is to rely solely upon your savings. Many people exhaust their savings in an attempt to fund care. Therefore, the most important, and the hardest, step to take is to not use your savings to cover the cost of care. 

Investments

Fortunately there are excellent alternative forms of funding available. The first step is to take a look at all of your assets, including investments. In many cases, selling investments such as stocks may be a better strategy. Another alternative is to get rid of assets that you no longer use, such as your car or additional property. The proceeds from the sale of these assets can be easily used to fund care.

Guide to Funding Your Own Care

Use Your Home to Fund the Care 

Another step is to see if you can use the equity in your home to fund your own care. There are some schemes that allow a person to use their homes equity to cover the cost of care.
  • The first of these schemes is called a lifetime mortgage. In this scheme, a loan based on the value of the home is issued. In exchange for the loan, the homeowner signs an agreement to turn the home over to the lender when he or she dies or moves out. The lender then tries to recover the funds lent by selling the home. To take advantage of a lifetime mortgage, a person will need to have no mortgage or a small mortgage on the home.
  • The second option is a home reversion scheme, whereby the home is sold to a home reversion company. The company lets the owner live in the home, but takes possession when he or she dies or moves out.
There are some disadvantages to both of these plans. You will not be able to leave the home to your family, nor will you be able to sell or rent it if you have to move to a care home. However, both plans provide a regular income that can be used to cover the costs of care.

The amount received from these schemes is determined by the value of the home and the amount of equity withdrawn. If the value is limited or the home is heavily mortgaged, the amount earned might not be sufficient to cover the cost of care.

Attendance Allowance & Other Benefits 

There are some other sources of funding for care that you can take advantage of. If somebody in your home needs care and is over 65, the Depart of Work Pensions offers Attendance Allowance. This is not means tested, so it is available to those that don’t qualify for NHS or council funding. Instead, it takes the form of a £51.85 or £77.45 a week allowance. The rate depends on whether night care is needed or not.
Other benefits and payments from charities and Benevolent Societies are also available. Check with your council to see what else is available in your area. 

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