When you are working on your financial plan, it is tempting to want to focus on the fun elements – holidays, family weddings or celebrations you want to fund, the house extension you want to build, the lifestyle you want to maintain. While those are all important, it is also imperative to plan for the not-so-fun possibilities. Chief amongst these in terms of financial impact is the cost of Care, should you require it.
The cost of residential care in Wales continues to be a critical issue for many families. Thanks to radical advances in medical science in the past century, people are living longer than ever before, but for some, there are health issues associated with old age, such as dementia, stroke or lack of mobility. Therefore, the demand for care homes and associated services is increasing. The financial burden that comes with residential care can be significant, and understanding how to fund it is essential.
Current Costs of Residential Care in Wales
The average cost of residential care in Wales varies depending on the level of care required, location, and the specific care home. For those needing residential care, which includes support with daily living but not medical care, the costs average around £955 per week. This equates to just under £50,000 per year as an average cost.
For those requiring nursing care, where medical assistance is part of the package, the costs are higher, averaging between £900 and £1,200 per week. This brings the annual cost to between £46,800 to £62,400.
These costs can fluctuate based on factors such as the quality of the care home, the amenities offered, and whether your loved one has specific care needs, such as dementia care, which tends to be more expensive.
Funding Residential Care in Wales
Residential care funding in Wales operates under a means-tested system, meaning that your finances, including income, savings, and assets, are assessed to determine whether you qualify for financial support.
As a client of UNIQ Family Wealth, you will fall into the category of people who are required to self-fund. This means that you must be prepared and plan ahead so that you have access to the necessary funds should you, your partner, or both of you require long-term care. If you fail to plan for this, you may find yourself in the unfortunate position of needing to sell property or other assets to cover your care. It is imperative to seek financial advice to explore your options here.
There are several other funding options available under strict criteria:
- Local Authority Funding: Your local authority will conduct a financial assessment to determine how much the individual can contribute. For those with capital and savings above £50,000, you will be expected to fund your care privately, though you may still qualify for some state assistance. For those with assets under this figure, the State will aid.
- Deferred Payment Agreements (DPAs): For those, whose potential care funding is tied up in property, and whose other savings and assets are below the maximum threshold of £50,000, a Deferred Payment Agreement can be set up with your local authority. This allows the council to cover the care costs initially until your property is sold, or until you can access your funds. This is effectively a loan, as these costs must be repaid once you have access to sufficient funds. This can allow a little flexibility if care is required suddenly or sooner than expected.
- NHS Continuing Healthcare: In some cases, individuals with complex medical needs may qualify for NHS Continuing Healthcare, a fully funded package that covers the cost of care in its entirety. This is assessed based on strict criteria, and eligibility is determined by the severity and nature of the individual’s health conditions.
- Top-Up Fees: Even if the local authority provides funding, it may only cover the standard costs. If your family wishes to place their loved one in a more expensive care home, they will need to pay a “top-up” fee to bridge the gap between the local authority’s contribution and the actual cost.
- 5. Home care fees: The upper threshold for home care fees in Wales is £24,000. Again, there is no lower threshold, so if your savings (your home isn’t included in a financial assessment for home care in Wales) are below £24,000, you’ll qualify for full funding from your local authority.
In Wales, you can only be charged a maximum of £100 per week for home care. If a service costs less than this amount, such as £50 a week, then this is how much you will pay. If a service costs more than this amount, such as £200 a week, you will still only have to make a £100 contribution.
The minimum income amount also applies here, meaning you must be left with at least £39.50 a week to spend however you like.
If you have less than £24,000 in savings but you have an income, this income will be considered when determining whether you need to contribute to your home care costs.
Planning for the Future
Given the rising costs of care, it is essential to plan ahead. You should work with UNIQ as we specialise in long-term care to help you understand your options, protect assets, and prepare for potential future care needs.
Residential care can be costly, but getting ahead by understanding the funding options available can ease the financial burden and ensure that you receive the necessary care in your later years, should you need it.
If you would like to speak to us about planning for your Care costs or simply have a question about planning for your future in retirement, please do not hesitate to contact us directly at on [email protected] or telephone 02920 782330.
Our phone lines are manned 9:00-17:00, Monday-Thursday. Please note we operate a four-day working week.
