Typical Costs in the Provision of Long Term Care

It is not just disheartening or frustrating to learn that you or your loved one needs long term care but it can also be quite discouraging when you realize just how much that care may cost you and your family. That is why it is completely justified that one of the first and biggest fears about moving into residential or nursing care is the price tag. However, before writing off long term care as something that will bankrupt you in the long run, it is important to have a firm understanding of exactly how much that care is likely to cost you. In fact, though the cost of care seems to continuously increase, the actual cost can vary quite substantially depending on the type and quality of the care needed. That is because specialized or unique care needs, along with certain nursing care needs, will of course cost more. However another major factor that determines the cost of your care may in fact be as simple as where you live within the UK. Depending on where you are, you may be paying more for the same services that someone in a different part of the UK is paying much less to receive.

The most expensive care is likely to be found in the Northern Home Counties. Here, the rough average cost for a residential care home is just under £600 per week and a care home with nursing care available is likely to run somewhere in the range of £900. Take this in comparison to the cheapest region which is Northern Ireland and North West England. Here, those same services have a very different price tag, especially if you factor in just how long you may be expected to pay for care. In these areas, the same services have average costs of roughly £450 per week for residential care and £600 for residential care with nursing. Now, at first glance this may not seem like a very substantial difference. However, keep in mind that long term care is meant to last quite a long time. Any difference in cost can really end up being quite substantial as it accumulates over time.

Of those admitted to care approximately 40% will have assets that are in excess of the current £23,250 means test limit and would therefore be responsible for funding their own care. It is easy to see from these figures that many people are concerned that with costs such as these their life’s savings and their property could quite quickly be swallowed up paying for care in the UK. That seems to be a legitimate concern given the current averages for receiving services.

A survey conducted in 2010 asked people where they would go to seek advice on paying for care. Surprisingly only 4% of them would have looked for a specialist financial adviser. However, it is these exactly advisers that are the most experienced in discussing with you all of your funding options. These options could potentially include capitalizing on current income streams as well as existing capital and investments. Options might also include the sale of your property or an equity release scheme that could enable you to receive care in your own home without the need to sell your property. Lastly, there are also long term care plans that might be available to you. These long term care plans are designed to pay a guaranteed income for the life of the person needing care in return for a capital payment at the start of the plan. The amount of this one-time payment, in the form of a lump sum, depends very highly on the individual’s age, health conditions, cost of care, and life expectancy. That is because the plan will pay out a guaranteed payment amount for the lifetime of the insured. One of the main benefits of paying for care in this way is that it allows you to put a cap of sorts on the amount of your capital that you will actually need to use to pay for your care. That is because you only have to make a payment one time and you are then guaranteed to be able to pay for your care for as long as you need it, especially if when you are building your plan, you factor in increasing costs. Escalation can in fact be built into the plan allowing for any increase in the cost of your care fees without you having to contribute any additional funds. With all of these different options available, it is imperative to talk with a financial adviser that can better address your exact needs as well as how to best manipulate your financial situation to ensure that you receive the care you need.