By Emma Simon
Guide to
Long and Short-term Care
Introduction
You have probably ordered this guide because you are worried about how you will care for a relative
or friend as they get older and their health deteriorates. Very often, it is a parent – but it may be your
husband or wife, or perhaps an elderly aunt who does not have any closer family.
In some cases, there may be very clear reasons why the issue of long-term care has arisen: their
health may be already faltering, or they are showing increasing signs of confusion. You may realise
that you will soon have to make important decisions about their future care, and need to know more
about your options.
For others such decision may be years away. Perhaps a recent event, such as a minor accident, a
fall, or even a parent being widowed, has brought this issue to the fore. It is often when people have
to look after relatives on a temporary basis – perhaps taking them to hospital appointments, helping
with housework, or cooking meals – that they start to think how they would cope if they needed on going and more specialist care.
However much you want to help, it can be difficult juggling caring responsibilities with work, family life,
and other demands on your time, particularly as many of us no longer live in the same county as our
parents, let alone the same street.
This guide is designed to answers all the questions you may have about the care system in the UK,
from finding the right type of care for a loved one, to advice on how you will pay for it.
Negotiating your way through this system can be a complex and often-frustrating experience, as you
have to deal with multiple agencies in the health service and local authority involved in delivering this
care. These problems are magnified by the fact this is often an emotionally difficult time for families.
All too often people often have to make life-changing decisions at very short notice. This is why it can
be best to arm yourself with as much information as early as possible. This guide hopefully provides a
useful starting point, so you understand the main issues involved and know where to go for more
detailed advice when you need it.
(Note: All figures and information given in this guide were correct at time of publication Dec 2010.
Please note that they may be subject to change. Some figures are usually up-rated annually, each
April. )
What is long-term care?
The catchall term “long-term care” actually describes a range of different levels of support and care
services. When most people think of long-term care, they tend to think of a care home. But there are a
wide range of care options now available, from getting help in your own home with basic tasks, such
as washing and dressing, to being cared for in a residential or nursing home.
Although it is primarily older people who access such services, younger people with disabilities often
also need help from the care system.
Often families find they don’t just need one type of care. People may move from one service to
another, as their health needs change. For example, initially it may be just a limited level of care at
home, complemented by some short-stay respite care, before moving onto receive nursing care in a
home at a later stage.
A brief outline of the different options is given below:
Residential Care
These are homes, which offer accommodation, meals, and personal care. They are suited for those
who are finding it difficult to cope at home, or who need more round-the-clock help than a carer or
family can provide. However, they don’t provide nursing care, so are unsuited for those with more
serious medical conditions. But they may be suitable for people with some dementia-related
conditions, with no other health problems.
Nursing Care
Nursing care can be delivered either at a person’s own home, or, more usually in a nursing home.
Like a residential home, a nursing home will offer accommodation, meals, and personal care – but
they will also have qualified nurses in attendance, 24-hours a day. This is to ensure medical
conditions are monitored, and to provide help with administrating drugs, giving injections etc.
Typically, fees will be higher at a nursing home because they need to employ these additional
qualified staff.
Respite Care
This is short-stay care, where a person goes into a nursing or residential home, to give their carers a
break. Alternatively, it might be for convalescence or postoperative care for people recovering from an
illness or operation.
Dementia Care
One of the most common reasons why people need some form of nursing care is become they have a
some dementia-related condition, such as Alzheimer’s disease. Often a residential or nursing home
may offer dementia specialist care. There are also specialist homes that have dedicated facilities for
those with more progressive dementia related illnesses.
Specialist Care and Learning Disabilities
Some homes will also offer specialist care for conditions like Parkinson’s or Huntington’s disease.
There are also units, which are specialists in the care of adults with learning difficulties who may need
a more supervised environment.
Terminally Ill and Palliative Care
Hospices specialise in the care of those with chronic conditions who are terminally ill. Palliative care
focuses on the control of pain and symptoms, and improving the quality of life. This specialist
approach often involves the individual, family, and carers. Many nursing and residential homes will
also offer palliative care services.
Paying for care
Paying for care is complex, and people are often at a loss to know where to start. This chapter guides
you through the various options, and helps explain whether you are likely to be a “self-funder” who will
have to pay the lion’s share of the care costs themselves or whether you will qualify for financial
assistance from your local authority.
It also explains the differences between the English, Welsh, and Scottish care systems: which
services are provided free, which ones are mean-tested, and the level at which such means tests are
applied.
What does a care home cost?
It is hard to give an exact price: it will depend on where you live, the type and level of care you need,
and the style and location of the care home.
If you just need residential and personal care, expect to pay between £350 and £750 a week; in other
words between £18,200 and £39,000 a year. Fees rise substantially for those needing nursing care.
Weekly fees average between £500 and £1,100, so people can expect to be charged between
£26,000 and £57,200 a year in a nursing home. Some luxury homes, particularly in London and the
South East can cost even more.
These costs can seem daunting – particularly when you consider many people will have to pay the
bulk of these fees themselves.
Do I qualify for local authority funding?
Once your local authority has assessed a person’s health and care needs, it will then assess their
ability to pay. Those deemed to have sufficient assets will find they have to meet these care costs
themselves. Remember, it is the person going into care whose wealth is assessed, not family
members.
This financial assessment will look at both a person’s capital (i.e. what property, savings or
investments they own) as well as their income (usually their pensions and benefits). As a rule of
thumb, if you own your own home – and a spouse isn’t still living in it – you are likely be deemed a
“self-funder” and will receive no help from the local authority.
However, those needing nursing care will receive a contribution towards this cost, regardless of their
financial position, which is paid direct to their care home; those in Scotland will also receive a
payment towards “personal care costs”, which includes help with washing, dressing etc.
Full details on the means-testing thresholds, plus these nursing payments, are highlighted overleaf.
Wales

If your capital is less than £22,000 then care costs are paid for by the local authority.

If your capital is worth more than £22,000 you will have to pay accommodation and personal care
costs.

If your capital is less than £22,000 but your weekly income is more than your care home fees and
the personal expenses allowance of £22.50 added together, you will have to pay the full cost.

A flat Registered Nursing Care Contribution of £119.66 is paid towards nursing care.
England

If your capital is less than £14,250 then the local authority will pay for your care costs.

If your capital is between £14,250 and £23,250, you will get a contribution towards these care
costs.

If your capital is above £23,250 – and this will include the value of any property or other assets
owned in most cases – then you will have to pay both accommodation and personal care costs in
full.

If your capital is less than the upper limit, but your weekly income is more than your care home
fees and the personal expenses allowance of £22.30 added together, then you will also have to
pay the full cost.

If you have nursing needs you should qualify for the Registered Nursing Care Contribution
(RNCC). This is paid regardless of whether you are a “self-funder” or whether the local authority is
paying care fees. This normal payment of £108.70 a week is paid direct to your nursing home, but
will, for self-funders reduce the amount they have to pay.

Those with the most severe nursing needs may also qualify for NHS Continuing Care. This
ensures all care costs are met by the NHS – and there is no means testing. However, eligibility
criteria for Continuing Care can vary throughout the country, leading to accusation of a postcode
lottery. Continuing Care is often only granted on a temporary basis, with patients being regularly
re-assessed. If the health of a family member deteriorates significantly and suddenly, ask your
local health authority whether they could qualify for this help.
Scotland

If your capital is less than £14,000, the local authority will pay for the cost of your care.

If your capital is between £14,000 and £22,750, you will get a contribution towards these care
costs.

If your capital is worth more than £22,750 you will pay the full accommodation cost, but you will
receive a contribution to the cost of your personal care.

If your capital is less than the upper limit but your weekly income is more than your care home
fees and the personal expenses allowance of £22.30 added together, you will have to pay the full
cost.

In Scotland, those over 65 receive a flat rate contribution of £156 a week towards personal care,
irrespective of their capital and income. They also receive a contribution of £71 a week towards
nursing care, again regardless of age and income.
When is the home not taken into account?
For many people it is the value of their home that pushes them above these stringent thresholds. But
there are certain circumstances in which the home is disregarded.

If a spouse, partner, or another relative aged 60 or over is living there, it should not be taken into
consideration. So, if a daughter, sister or other relative has moved in make sure this is stated on
any assessment forms.

The value of the home should also be disregarded if your care needs are classified as
“temporary”.

If the value of any other assets, apart from the home, are worth less than £23,250 (or the
equivalent in Scotland and Wales), then you should not have to pay care costs for the first 12
weeks. However, those in a private nursing home would have to pay the difference between the
local authority rate and the fees charged by their care home during this period, assuming the care
home charges more.

If the value of any other assets, apart from the home, are worth less than £23,250 you can
request that a legal charge is put on your home, rather than selling it upfront. This means that the
local authority will pay the costs, and recoup them from the sale of the property at a later date,
typically when the person going into care has died.
There are two advantages to this: it may enable the home to be rented, so contributing to care costs;
and it also allows the person’s estate to benefit from any subsequent rise in property prices. Again,
people may have to still pay the difference between what the local authority will fund, and the fee
charged by a private care home.
The local authority is obliged to take into account the “current market value” of the home. It may be
possible to take the home out of the care equation by altering the way in which it is owned. Most
couples buy a property as “joint tenants”, which means on the death of either, their share is
automatically transferred to the other. But for a small fee you can change the ownership to “tenantsin-common”, which gives either party the right to bequeath their share to whomever they like.
Such arrangements are sometimes made to reduce inheritance tax liabilities. So, if on the death of the
first spouse their half of the home is passed to the children, or into a trust, then it is possible that the
whole home may be disregarded should the surviving spouse need nursing care at a later stage – as
half a house can have a negligible market value if the other half is owned by a third party. However,
be very careful of violating the “deliberate deprivation” rules.
Deliberate deprivation
No one should deliberately give away assets – be it savings, investments, or a property – or sell them
at less than their market price, in order to avoid paying care costs. This is known as “deliberate
deprivation”, and if the local authority rules you have done this it has the legal right to ignore the gift
and assume you still own the asset in its financial assessment. This means you are likely to still have
to pay care costs in full.
In some cases, some local authorities have challenged gifts or sales dating back 10 years. Anyone
looking to gift assets, for any reason, should always seek professional advice – as to both their tax
position and to take into account potential future care needs.
Financial options for self-funders
Given the expense of long-term care, most people resort to using their home to pay these fees, either
by selling it to meet the costs, or selling the home to buy an insurance plan, know as an annuity. The
pros and cons of each are discussed below.
Selling your home
The simplest option may be to sell the home, bank the proceeds, and use these funds to pay the care
fees. The main disadvantage of this is that even with properties worth substantial sums, these funds
can soon be depleted if care is needed for a number of years.
If this happens and capital is reduced below the £14,250 level (or equivalent in Scotland or Wales),
then the local authority will pick up the tab for future care fees. This though may mean moving the
resident, if the fees charged by their current nursing or residential home exceed local authority limits.
Insurance plans
Rather than simply sell the home and use the proceeds to pay the fees direct, it is worth investigating
whether this money should be used to buy a special type of annuity, designed to cover long-term care
costs.
These are called “immediate needs annuities” and can only be bought at the point at which a relative
goes into care. For a fixed lump sum, these guarantee to pay an annual income for life.
This can provide a degree of certainty for those moving into care, as they know their money will not
“run out”, so they won’t have to move home at a later stage. There is also the reassurance that
whatever is left from the sale of the home, once the annuity has been bought, can be left to the next
generation. In many cases, payments from the annuity are made direct to the nursing home, so are
not subject to tax.
The price charged depends on the person’s age, gender, and health – the longer the insurer expects
you to live, the higher the cost will be.
Of course, the downside is that if the person dies shortly after going into nursing care, this is likely to
be a more costly option than simply paying the fees direct. But many families are willing to take this
risk for the peace of mind of knowing care fees will be met indefinitely. Figures indicate that one in 10
people in a nursing home live for more than eight years.*
Initially the cost of these annuities can seem high. In many cases, they can only be afforded by selling
substantial assets, such as a home. There are a number of specialist providers offering these
annuities. Those thinking of buying one should seek specialist financial advice (see chapter seven:
useful contacts)
Make sure you know what the maximum paid out is per year, and compare this to the care home
costs. It is often worth paying extra to buy an annuity that ensures the annual payment increases
each year in line with inflation. This should help cover any future rise in care fees. (However, if your
nursing home fees rises faster than this you will have to pay the different.)
It is also possible to buy “capital protection” which ensures that if you die very soon after purchasing
the product part of the cost is refunded to your estate. Also, compare quotes from more than one
provider, as prices can vary substantially.
According to Partnership, the cost of buying an immediate care needs annuity, for an 85-year-old
woman with early stages of dementia, would be about £85,000. This would pay an annual income of
£16,500*. In this example, the person would have to live for just over five years for the annuity to pay
for itself.
*Source Partnership, figure correct as of May 2010
Using savings and investment
For wealthier individuals it may be possible to meet some, or all of their care costs from other savings.
Most aren’t going to have enough capital to generate the income to pay these costs, so usually the
capital gets spent on these fees. Again, there is a significant chance that savings will be exhausted
after a few years, forcing people to rely on local authority funded care instead. Again, those with
sufficient savings may be able to use them to buy an immediate needs annuity, to cover some or all of
their care costs.
Changes in capital or income
If your capital and income drop below the relevant threshold, you can apply to the local authority for
help with care cost, even if you had previously been a self-funder. However, if the home you are in
charges more that the local authority would normally pay, you may have to move into a cheaper home
whose fees are in line with local authority guidelines. In some circumstances you can arrange for a
third party (such as your family) to “top-up” these local authority payments. But the council will want
proof that any third party can continue to make these payments over the longer term. When choosing
a home it is worth knowing what the local authority will pay – even if you are not receiving any help
from them at present, if you think there is a chance that a person’s capital could be quickly depleted.
Most local authority review financial assessment just once a year – so you may need to contact them
if you need one sooner.
Choosing a care home
Whether you are paying or the local authority is meeting your care costs you should still have a
genuine choice of a range of care homes.
There are now nearly half a million people living in care homes in the UK, and while moving into one
can be a big upheaval, many do find, once they are settled, that it is a relief to be looked after by
professional carers. It can also ease the burden on close relatives, who are often elderly themselves.
Finding the right home
Many people don’t start looking until a health situation has reached crisis point. This can mean
decisions are rushed and people don’t have sufficient time to weigh up their options properly. If you
think realistically there is a chance you may need care within the next year or so – either for yourself
or a relative –start looking at homes in your area. Any decent home will be happy to show you around,
and send you information about the services they offer, fees etc.
Can I choose the home I want?
Even if you are funded by your local authority you should still be able to choose from a number of
nursing or residential homes. However, those with the highest fees may not be suitable.
Those who are funded by their local authority aren’t restricted to just local council-run homes. Your
local authority is obliged to tell you the maximum it will spend on your care; if you find a privately run
home within this price range, it should cover your fees. However, the local authority will check that it
offers suitable care for your needs (for example, if you have dementia, it may need to have specialist
dementia-trained staff) and that there is accommodation available.
Those who are self-funders will obviously have a greater choice, but they will still have to ensure that
any home meets their own budget. It is also worth considering what would happen if your savings run
out. If you fall back on local authority funding would this mean you have to move into a different
nursing home at a later stage.
Some financial products could be useful in these circumstances (see insurance plans and annuities in
the previous chapter).
What to look for when choosing a care home
For those helping relatives find a care home there are a number of considerations to bear in mind.
Obviously, you want a home that you feel confident provides a good level of care and has friendly
helpful staff. As a priority, you need to ensure it offers suitable facilities for the individual’s medical
needs. Ask whether each person has their own care plan, and whether the individuals and families
are involved in making decision about their care.
Remember a good home should provide good all round care, from a person’s medical needs to
ensuring they are well fed with good nutritious meals, have company, and activities to entertain them.
Regular communication between staff, residents, and relatives is the bedrock of providing such
services.
If you are seeing several homes it can make sense to take a checklist with you (a brief one is
provided at the back of this guide, and a fuller version online) to help you compare the facilities
available.
Some of the key points to bear in mind include:
Location: Is it handy for relatives and friends to visit? Is there access to shops, public transport if
relevant?
Accommodation: What is the size of the room? Can residents bring their own furniture and
possessions? Is there a garden, or outside space to enjoy? It is also worth looking at communal areas
– is there more than one area where residents can sit, and is there a quiet lounge without a TV, for
example.
Staff: First impressions are important. Were the staff welcoming and friendly? Did the home smell
clean and fresh? How did other residents seem: did they look happy and well cared for? It’s also
important to ask whether there will be one particular member of staff who is responsible for a person’s
care.
Medical care: How often are care needs reviewed? Are there visiting doctors, dentists and opticians?
Are any complementary therapies provided, and other services such as chiropody, physiotherapy,
and occupational therapy?
Activities: It is worth looking at what regular activities are planned, as well as what special events
that are celebrated in the home. Are residents encouraged to take exercise? Are the opportunities for
trips outside the home?
All care homes in the UK are inspected and you should be able to get a list of local homes, plus their
inspection reports from the Care Quality Commission in England. (In Scotland, you need to contact
the Care Commission; in Wales it is the Care and Social Services Inspectorate for Wales). Similarly,
the Elderly Accommodation Counsel provides lists of homes in most areas.
You can also contact the Relatives’ and Residents’ Association – which offer support and advice to
families who have relatives in care. All numbers appear at the back of this guide.
Getting the right assessment
If you think a relative is in need of care now, it is important you contact the local authority social
services department. They have a legal responsibility to assess the needs of those who may require
care services. Alternatively, that person’s GP may also refer them to the local authority.
The first assessment will look at the person’s medical needs. If they are assessed as needing care –
either at home, or in a residential or nursing home – you will be told the maximum amount the
authority will pay per week. This should be based on their individual medical needs, so someone with
dementia, needing round-the-clock care will qualify for a higher payment than someone who just
needs help with washing and dressing.
It is only at this point a financial assessment will be made to work out how much the individual has to
pay towards these costs. This will look at both the capital a person has (i.e. any savings, investments
and property they own) as well as the income they receive from a pension, and any other state
benefits. The person and their carers should be given a detailed breakdown of these calculations, and
you should be informed whether you will have to pay the care home direct, or make payments to the
local authority.
Direct payments
If the initial assessment says the person needs more help, but this can be provided within their own
home, they should qualify for Direct Payments. This means they get money from the local authority to
enable them to choose the help they want and who provides it. Your social worker or local council
should give your more information about this service.
These payments are designed to support people in their own homes and can’t be used for full-time
residential care. However, you may be able to use direct payments for occasional respite periods in
residential accommodation, provided your local authority agrees that this is what is needed.
Again, if anyone who has been supported in their own home, needs their condition reassessed it is
important to contact the local authority as soon as possible.
Pensions, benefits, and power of attorney
If you are looking after someone, it is important to understand how moving into a residential or nursing
care home can affect their pension and benefits. If you think their mental faculties are declining, rather
than just their physical health it is important to discuss setting up a power of attorney, prior to such a
move. This will enable a close relative to make both financial decisions on their behalf as well as
decision related to their care. More details on these aspects are given below.
Pensions
People will still be entitled to their state pension and any work-placed pension if they go into a home.
However, these will be taken into consideration as part of a financial assessment, and in many cases
this income will have to be used to help meet care costs. These assessments will allow care home
residents to keep about £20 of their weekly income as “spending money”.
Going into a residential or nursing home may affect your entitlement to pension credit. You may still
get the “guaranteed” part – which tops up everyone’s income to a guaranteed minimum per week. But
if you have substantial savings this will reduce your entitlement to these top-up payments.
Attendance allowance and disability living allowance
Both of these will stop if your local authority is paying for you to move into a residential or nursing
home. They will stop four weeks after the date you move in on a permanent basis. This applies
whether the local authority is paying fees in full, or just contributing in part. If you are paying for your
own care fees these benefits should continue to be paid in full.
Carers’ allowance
If a relative or spouse is paid a carers’ allowance because they are looking after you this will also stop
if either the attendance allowance or disability living allowance is stopped.
Housing benefit and council tax benefit
Again, both of these will be stopped if you move into a care home on a permanent basis; they won’t
be stopped if you are just receiving temporary or respite care. If you are part of a couple who
previously claimed this benefit in your name, it is important that your husband or wife inform the local
council so they can claim this in their own name.
Power of attorney
Most of us have a will, stating what we want to happen to our estate – and any dependants – when
we die. A power of attorney is a similar legal document in some respects: you are setting out your
wishes as to how you affairs will be managed if you are no longer able to do so during your lifetime.
The most common reason for this would be some kind of mental impairment, either as a result of a
stroke, or because you have a form of dementia, such as Alzheimer’s.
In such cases it, children or even a spouse don’t have an automatic legal right to take over your
financial and legal affairs. If you have a joint account with a spouse, for example, they should be able
to continue using it even if your mental health declines. But if you have a savings account, or
investments in your name only, a spouse might not be able to access these without your consent –
even if they need the money to help pay for your care, or support themselves. This is why it is
important to consider establishing a power of attorney long before the need arises.
With a power of attorney, you appoint someone to act on your behalf if you are not able to do so. This
is called a Lasting Power of Attorney. It is important to understand this does not give them the right to
access all your finances immediately, or over-rule any decisions you have made. This Lasting Power
of Attorney will only be “registered” or enacted if you are judge by a medical practitioner not to have
the mental capacity to manage your own affairs.
Of course, you need to be considered “of sound mind” to set up one of these documents. And people
remain free to change these at a later stage, or cancel them completely. Although these remain a
relatively simple legal process, it is important to seek advice from a lawyer or solicitor. More
information is also available from the Care Aware Helpline – details at the back of this book.
Further information
Are you retiring soon? Telegraph Retirement Services (provided by AEGON Direct) can give you
advice on whether you could boost your retirement income.
CHARITIES
Age UK
0800 169 6565
www.ageuk.org.uk
Alzheimer’s Society
0845 300 0336
www.alzheimers.org.uk
www.talkingpoint.co.uk
The online forum for dementia carers
Arthritis Care
0808 800 4050
www.arthritiscare.org.uk
CareAware Helpline
0161 707 1107
Counsel and Care
0845 300 7585
www.counselandcare.org.uk
Huntington’s Disease Association
0151 298 3298
www.hda.org.uk
Macmillan Cancer Relief Centre
0808 808 0000
www.macmillan.org.uk
Mind (National Association
for Mental Health)
08457 660 163
www.mind.org.uk
Patients’ Association
0845 608 4455
www.patients-association.org.uk
The Princess Royal Trust for Carers
0844 800 4361
www.carers.org
Admiral Nurses
0845 257 9406
HOUSING
Association of Retirement
Housing Managers
020 7463 0660
www.arhm.org
(Provides a code of conduct for care homes, can provide list of members)
Care Quality Commission
03000 616161
www.cqc.org.uk
Care Commission (Scotland)
0845 603 0890
www.carecommission.com
Care and Social Services Inspectorate
Wales: 01443 848450
www.CSIW.wales.gov.uk
Elderly Accommodation Counsel
020 7820 1343
www.eac.org.uk
(provides advice on finding and paying for all types of care homes and sheltered housing)
Residents and Relatives Association
020 7359 8136
www.relres.org
United Kingdom Home Care Association
020 8288 5291
www.ukhca.co.uk
Registered Nursing Home Association
0800 0740 194
www.rnha.co.uk
(provides information on registered nursing homes which conform to specified standards)
Goldsborough Estates
0800 0740 194
www.goldsboroughestates.co.uk
Specialises in the management of private retirement and assisted living properties throughout
England and Wales
BENEFITS
Department of Work and Pension
Benefits enquiry line
0800 882 200
www.dwp.gov.uk
Attendance Allowance & Disability
Living Allowance helpline
0845 712 3456
Direct Payments: 08701 555 455
www.dh.gov.uk/publications
NHS Funded Nursing Care
0870 1555 455
For a free leaflet on NHS-funded care in nursing homes
ADVICE
Bupa Care Services:
0845 600 4622
www.bupa.co.uk/care-homes
Eldercare Solutions
0800 082 1155
www.eldercare-solutions.co.uk
Grace Consulting
0800 137 669
www.graceconsulting.co.uk
Independent Financial Advisers
Promotion
0800 085 3250
www.unbiased.co.uk
Can provider list of financial advisers in each local area, specialising in key areas, such as long-term
care
Law Centres Federation
020 7428 4400
www.lawcentres.org.uk
Nursing Home Fees Agency
0800 99 88 33
www.nhfa.co.uk
Offers specialist advice on paying long-term care fees
ERENCE
ISOURPEOP
Lvisit www.bupa.co.uk/careguides