What the options are when paying for care privately
There are a range of options available to pay for care at home, such as:
- Immediate Needs Annuity/Immediate Care Plan
- Downsizing the home
- Equity release
- Gaining a regular income from savings investments
Immediate Needs Annuity/Care Plan
This is an immediate need care fees payment plan and is a type of annuity contract.
An annuity is a type of insurance policy to provide you with a regular income in exchange for an upfront lump sum investment. This can be used to pay for care and would usually be paid directly to the care provider of your choice.
They can be used for long-term care as they provide a guaranteed income for life to pay for care costs, which can take the worry out of wondering how long you will be able to pay for care. When advised on properly, an Immediate Care Plan (ICP) is the only way you can ensure the money doesn’t run out for longer term care needs.
Downsizing the home
This is quite a popular option among ageing parents. Especially if they are still in a five bedroom family home as this can take a lot of work to maintain, as well as keeping it clean. Some people decide they have no need to be rattling around in a larger home when their children have their own families. It may be that they could move closer to family so as to get help when needed, or make it easier for visits, or they may wish to saty within their own community.
There are private retirement apartments in many areas that could be a good option. Or simply finding a smaller home that is easier to manage and could release some equity from the larger home.
This is an option for when you would rather keep the family home and stay in your community, without the hassle and stress of finding a new home and moving. Equity release can allow access the equity currently tied up in the family home if you are over the age of 55.
The money released can be taken as a lump sum, in several smaller amounts or as a combination of both.
Gaining a regular income from savings investments
If your relative has a large amount in savings then it can be worth checking how this is invested as it could be possible that an income could be earned from this. A financial advisor will be able to help with this.