Self-Funding Care: What Are Your Options?

Self-funding care describes using personal resources, such as savings, to finance one’s own long-term or health care costs, giving complete control over the type of support received without involving the council or insurance companies.

This method of financing care provides an alternative to state-provided services, often enabling access to higher quality or more personalised support. However, the process can be difficult to navigate for first-time self-funders. This article aims to explore the various options you have at your disposal.

Self-Funding Care: A Closer Look

Personal Savings

Personal savings is one of the most straightforward ways to cover care costs. This option provides quick access to funds and complete control over money spending. However, using savings can deplete financial resources quickly, especially if high-cost care is required over a long period.

Sale of Assets

Another option is the sale of assets—like property or stocks—to generate the necessary capital. While this method can provide a significant cash influx, it’s essential to consider the possible tax implications and the emotional impact of selling valuable or emotionally substantial assets.

Lifetime Mortgage

A lifetime mortgage is an equity release scheme that allows you to borrow against your home’s value while retaining ownership. The loan and accrued interest are paid back when the house is sold, usually after the homeowner dies or enters long-term care. This method can provide a regular income or a lump sum, but it reduces the final estate’s value.

Immediate Needs Annuity

An immediate needs annuity is an insurance policy that, in return for a one-off payment, provides regular tax-free income for life, specifically to cover care costs. This option includes certainty, knowing that care costs will be covered for the rest of your life. However, the price can be high, depending on the individual’s age and state of health.

Considering Levels of Care

Individuals requiring care often have different needs. Understanding what type of care is needed before exploring funding options is crucial.

Residential Care

Residential care involves living in a care home that provides support and care around the clock. The scale of services offered varies depending on individual needs. Logistically simpler than organising home care, it can be more expensive due to the additional costs of lodging, meals, and round-the-clock staffing.

Home Care

Home care involves care workers visiting the home to provide care, allowing the individual to remain in familiar surroundings. Home care costs vary depending on the amount of support needed each day, but it might be a more cost-effective option for some.

Live-In Care

Live-in care is another type of home care where a professional carer lives in the individual’s home, providing continuous care and companionship. While live-in care offers the highest level of support among home care options, it also comes with a higher price tag.

Beyond Monetary Considerations

While finances often dominate the conversation around self-funding care, it’s important to remember the emotional and qualitative aspects of choosing a care option.

Quality of Life

Each person has unique requirements and preferences, which should be a pivotal part of decision-making. Does the person thrive on the social interaction that a care home provides, or are they more comfortable in the privacy of their own home?

Independence and Familiarity

The feelings of independence and familiarity with the home environment can significantly impact a person’s well-being. Many people prefer home care or live-in care over residential care, as it allows them to maintain some independence and routine.

Personal Relationship with Caregiver

A strong personal relationship with the caregiver can significantly enhance the quality of care. When considering a home care provider like PrimeCarers, remember that it can offer invaluable peace of mind, knowing that the chosen caregiver is highly skilled and trusted.

Navigating the Path to Self-Funded Care

Securing the proper care is a journey, and self-funding care can initially seem bewildering. However, by considering the financial implications, the level of care needed, and the quality of life, you can navigate the path to self-funded care effectively.