Paying for Care

Explore your options for funding home care.

The cost of care should not stop you from receiving the quality support that you deserve.

We know that cost is a big consideration when it comes to choosing a care service. In this guide, we present different funding options for care and a range of benefits that may help to reduce the overall cost. Before making any financial decisions, it is important to speak to your financial advisor.  This information should not be considered financial advice. 

If you have any questions along the way, reach out to our care team, we are more than happy to signpost you to relevant resources or organisations.  

Option 1: Self-funding your homecare

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Self funding means to cover one’s own care costs. To fund your own homecare, you could use:

  • Savings
  • Liquid Assets
  • Pension Fund
  • Equity Release

For those who need care and support for daily living, the government offers different funding options:

  • Attendance Allowance
  • Personal Independence Payment
  • NHS Funding
  • Local Authority Funding
  • Disabled Facilities Grant
  • Other Benefits

Option 2: Government Funding & Benefits

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Self-funding your homecare

Benefits of self-funding:

Paying for your own care ensures you have freedom of choice and more control over what type of care you receive.

Self-funding typically applies to individuals whose capital exceeds the threshold for local authority support of £23,250 (in England), though this amount may vary depending on your location.

Most common ways to self-fund care:

To fund your own care, you could use savings, liquid assets, your pension fund, or take out an equity release.

Many in the UK already choose Equity Release to supplement their retirement income.

paying for care

What is Equity Release?

An equity release is a loan arrangement where you can access the money tied up in the value of your property while you continue to live in your home. You can receive a lump sum or monthly payments based on the property value. Because you are living in your home, you are responsible for the maintenance costs, rates, and council tax.

PROS

  • Tax-free payments to supplement your pension
  • You continue to own and live in your own home

CONS

  • May make it harder to move or sell your property
  • May effect your eligibility for certain benefits.

Types of Equity Release

There are two main types of equity release, Lifetime Mortgage and Home Reversion Plan.

What is a Lifetime Mortgage?

A lifetime mortgage is a loan secured against the value of your home with no need to pay back the money until you pass away or sell your property to move permanently into residential care.

What is a Home Reversion Plan?

A home reversion plan allows you to sell all or a share of your home to a reversion company for a lump sum or monthly income. You can continue to live in your home rent-free until you pass away or move permanently into residential care. 

There are important key differences in age limitations, home ownership, interest rates & flexibility.

LIFETIME MORTAGE

HOME REVERSION PLAN

Age limitation:

You need to be over the age of 55 to qualify for a lifetime mortgage. If you are borrowing jointly, both of you need to be over the age of 55.

Age limitation:

You need to be over the age of 60 to qualify for a home reversion plan. If you are borrowing jointly, both of you need to be over the age of 60.

Home Ownership & Inheritance:

You retain full ownership of your home. Your next of kin will inherit the property when you pass away, but the balance of the loan will need to be paid back from the proceeds of the sale.

Home Ownership & Inheritance:

You will not retain full ownership as you would have sold all or a share of your home. Your share of the home will always remain the same whatever happens to its market value, unless you decide to take further cash releases.Your next of kin may inherit your share of the home.

Interest Rates:

Interest is payable on the amount you borrow and rates may be fixed for the life of the loan, or variable. As you’re paying interest on the interest you have already accrued, and none of the loan is being repaid, your debt can be considerable. Alternatively, some plans allow you to make regular or ad hoc repayments to help reduce costs. Taking out a lifetime mortgage with a provider that is a member of the Equity Release Council means you will be covered by a ‘no negative equity guarantee’, which ensures that your debt will never exceed the value of your home.

Interest Rates:

There are no repayments as no interest is payable on the money you receive from the reversion company.

Flexibility:

While most lifetime mortgages are portable, meaning you can transfer them to another home, in reality, you may face difficulties if the house you wish to move to is worth less than your current residence.

You can repay the loan early but this often involves hefty early payment penalties.

Flexibility:

While most home reversion plans are portable, meaning you can transfer them to another home, in reality, you may face difficulties if the house you wish to move to is worth less than your current residence.

If you want to buy back the share sold, this will be at a much higher rate than what it was sold for.

Equity Release FAQs

As each property value and financial position is different, you will need to calculate this based on your personal circumstances. You can calculate how much equity you can get from your home using this online Equity Release Calculator. 

The property must be in the UK, and it must be your main residence. Your property also needs to be in reasonable condition and over a certain value. There may also be restrictions on the type of property accepted.

Yes, it is possible to still qualify for equity release if you have a mortgage or other loan secured against your property – but it will depend on the value of your home and the amount you owe. You’ll have to pay off any outstanding mortgages or loans secured against your home at the same time as taking equity release.

Equity release can affect the benefits you receive and may have an impact on benefits that you may become entitled to in the future.
If you receive any means-tested benefits, they may be reduced or lost entirely. Means-tested benefits include:

  • Pension Credit 
  • Jobseeker’s Allowance 
  • Income Support 
  • income-related
  • Employment and Support Allowance 
  • Universal Credit 
  • Council Tax Support 

A specialist equity release adviser will be able to advise what will happen to your benefits if you take out a plan.

Are there other, less risky ways you could boost your income? Such as a normal loan or remortgaging.

How will releasing equity affect your benefits?

How will it affect your eligibility for free social care – or the amount you pay if and when you need this care?

Will it affect your ability to move in the future? Most providers let you transfer equity release from one property to another – but they might not if you’re moving to age-restricted or leasehold retirement housing, for instance, or if the value is less than your current residence.

How this may affect the inheritance left to your beneficiaries. While the decision is completely yours, you may want to speak to your beneficiaries about it. 

All finanicial firms advising and selling equity release have to be regulated by the Financial Conduct Authority (FCA). This provides protection, security and access to the Financial Services Compensation Scheme if you need it.

You should choose to work with a company that is a member of the Equity Release Council. This will ensure you can live in your property for life, or until you move into permanent residential care, and you will never owe more than the value of your home when it is sold after you die or move into permanent residential care.

As with any financial decision, there will be risk but here are a few steps that you can take to ensure that risk in minimised:

Always make sure you speak to a specialist equity release adviser, and that both the adviser and the equity release provider are authorised by the FCA.

No, you are only eligible for equity release on a property that is your main residence. 

For any dependents or other people living with you or on the property will need to sign a waiver confirming they understand they don’t have the right to keep living in/on the property if you die or move into permanent care. This also applies to anyone who moves in/onto the property in the future. 

Government Care Funding & Other Benefits

Our Government Care Funding and Benefits section explains which options are available only to those needing care and those available to anyone, as well as the funding amount and how to apply for each government benefit.

Government care funding and benefits ONLY applicable to those needing care:

  • Attendence Allowance (over 65)
  • Personal Independence Payment (under 65)
  • NHS Funding
  • Local Authority Funding
  • Disabled Facilities Grant

Other Government Benefits, some of which may be useful in lowering general household costs.

  • Pension Credit
  • Universal Credit
  • Cold Weather Payment
  • Winter Fuel Payment
  • Warm Home Discount Scheme
  • Carer’s Allowance
  • Council Tax Reduction
  • Bereavement Support Payment
  • Health Benefits
  • Travel Benefits
  • TV Licence Discounts

Which benefits and how much am I eligible for?

The benefits and support funding you are eligible for will depend on your personal needs and circumstances.

This useful calculator helps you check which benefits you may be eligible for, Alternatively, you can browse the full list of benefits, including their requirements, funding amount, and application instructions .

Attendence Allowance

Attendance Allowance is available to those who are above State Pension age and need care because of a disability.

You may be eligible for Attendance Allowance if:

  • You are over the age of 65
  • You require extra care because of a physical and/or mental disability
  • You have needed help for at least 6 months

Attendance Allowance funding amount:

£72.65 PER WEEK
if you need frequent help or constant supervision during the day, or supervision at night.

or

£108.55 A WEEK
if you need help or supervision throughout both day and night, or if you are terminally ill.

How to claim Attendance Allowance:

1. SUBMIT A CLAIM
Download the claim form

or

2. APPLY online
or
Post the completed form to Freepost, DWP Attendance Allowance

Personal Independence Payment

Personal Independence Payments are available to those who need assistance with daily activities because of a long-term illness or disability.

You may be eligible for Personal Independence Payment if:

  • You are 16 or over but under the age of 65 (when you first start receiving this payment)
  • You have a long-term health condition or a disability
  • Your condition or disability makes it harder for you to do daily tasks
  • You expect these difficulties to last for at least a year from when they started

PIP funding amount:

There are two parts to this payment: the daily living component and the mobility component.

DAILY LIVING
£72.65 per week or £108.55 per week, depending on the kind of support you need

MOBILITY
£28.70 or £75.75 per week, also depending on the level of assistance that you need

How to claim for PIP:

Apply online (which will require your NI number, email, and mobile phone number)

or

Call 0800 917 2222 or text 0800 917 7777 to ask for a claim form

or

Post a letter to Freepost DWP PIP 1 (no postal stamp or postcode is required) and they will send you back a form (please note that this option is slower than other options)

NHS Funding

NHS funding is for adults who have needs that arise from a disability, accident, or illness that require intensive care.

You may be eligible for NHS Funding if:

  • You have a serious disability or illness that results in high care needs

NHS funding amount:

If you are eligible for this funding, all of your care costs will be covered (including the cost of care services).

 

How to claim for NHS Funding:

To determine if you are eligible for this funding, you will have to ask your GP for an assessment.

Local Authority Funding

If you have care or support needs and have limited financial resources, you may be eligible for Local Authority funding.

You may be eligible for Local Authority Funding if:

  • You have care needs
  • You have less than £23,250 in savings

Local Authority funding amount:

Your Local Authority may pay a portion towards your care while you are expected to cover the rest. (This amount depends on how much you can afford and what type of care you need)

Some services are provided for free if you need them, no matter your income. These include:

  • Home adaptations or equipment that each cost less than £1,000
  • Care after you have been discharged from hospital

How to claim for Local Authority Funding:

You will first have to get a needs assessment from your local council. After this, your local council will inform you of how much they will contribute towards your care costs. You can arrange a needs assessment here

Disabled Facilities Grant

If you need to make home modifications because you have a disability or certain health conditions, you may be eligible for a grant from your council.

You may be eligible for Disabled Facilities Grant if:

  • You have a disability, chronic health condition or terminal illness.
  • You need to adapt your home for your needs
  • You intend to live in the property during the grant period
  • You are the owner, tenant, or landlord of the property.

Disabled Facilities Grant amount:

Depending on your household income and savings, you could get up to £30,000 (in England)

How to claim for Disabled Facilities Grant:

You will have to apply to your local council for a Disabled Facilities Grant to begin the process click here

Pension Credit

Pension Credit assists you with living costs if you are over State Pension age. This is separate from your State Pension, and you may get this benefit in conjunction with other benefits.

You may be eligible for Pension Credit if:

  • You are over State Pension age
  • You are on low income

Pension Credit amount:

Pension Credit is a means-based benefit. It increases your income to: £218.15 per week if you are single £332.95 per week (joint weekly income) if you have a partner.

If your income is higher than these amounts, you may still be eligible for this benefit if you have a disability, are caring for someone, or have housing costs.

How to claim for Pension Credit:

Apply online

or

Call 0800 99 1234 or text 0800 169 0133

or

Post the filled-out claim form to Freepost DWP Pensions Service 3. If you have a partner, you must include them in your application.

Universal Credit

If you are on low income and need help with your living expenses, you may be able to get Universal Credit.

You may be eligible for Universal Credit if:

  • You are on low income or need help to cover your living expenses
  • You are 18 or over (although certain exceptions may apply for those who are 16 or 17)
  • You are under State Pension age
  • You have £16,000 or less in money, savings and investments

Universal Credit amount:

Universal Credit is a monthly payment that depends on your income and other personal circumstances.

You could receive from £311.68 to £617.60 per month based on age, income and marital status with the possibility of more money being added to your monthly payment due to disability, ability to work & number of dependents.

How to claim for Universal Credit:

Apply online

You will need your bank account details, an email address, a phone number, and other supplementary documents (identity documents and information about your housing, income and other benefits) to apply. If you live with a partner, you both need to create application accounts. These accounts will be linked when you make a claim.

Winter Fuel Payment

The Winter Fuel Payment helps you to cover your winter heating costs. It is a tax-free annual payment.

You may be eligible for Winter Fuel Payment amount if:

  • You were born before 25 September 1957

Winter Fuel Payment amount:

Between £250 and £600, depending on whether you live with a partner, if you live in a care home, and if you or your partner is born before 25 September 1943

How to claim for Winter Fuel Payment:

If you are eligible, you should receive a letter in October or November that tells you how much will receive. If you don’t receive a letter but think that you are eligible, click here

Warm Home Discount Scheme

The Warm Home Discount scheme is for those are on low income and is a once-off discount from your electricity bill.

You may be eligible for Warm Home Discount Scheme if:

  • You are on low income and have high energy costs
  • You get the Guarantee Credit component of Pension Credit

 Warm Home Discount Scheme amount:

£150 discount on your electricity bill (once-off)

How to claim for Warm Home Discount Scheme:

If you are eligible, you should receive a letter in October or November that tells you how much will receive. If you don’t receive a letter but think that you are eligible, click here

Cold Weather Payment

The Cold Weather Payment is a benefit to help you with additional heating costs during particularly cold weather.

You may be eligible for Cold Weather Payment if:

You are receiving certain benefits (Pension Credit, Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Universal Credit, or Support for Mortgage Interest)

The average temperature in your area is recorded as zero degrees Celsius or below for seven consecutive days

Cold Weather Payment amount:

£25 for each 7-day period of very cold weather between 1 November 2024 and 31 March 2025

How to claim for Cold Weather Payment:

You should be paid automatically within 14 working days of the period of cold weather.
For more information, click here

Carer’s Allowance

Carer’s Allowance is to support those who care for someone else. You do not have to live with or be related to the person that you care for to get Carer’s Allowance.

You may be eligible for Carer’s Allowance if:

  • You care for someone else for at least 35 hours a week and you are 16 or over
  • You are not studying full-time or for 21 hours a week or more
  • You have been in the UK for at least 2 of the last 3 years
  • You earn £151 or less a week
  • The person you care for receives benefits

Carer’s Allowance Amount:

£81.90 a week

How to claim for Carer’s Allowance:

Apply online

or

Apply by post, following the instructions detailed on this web page

or

Call the Carer’s Allowance Unit at 0800 731 0297 or text them at 0800 731 0317 to request an application form

Bereavement Support Payment

Bereavement Support Payment is available to those who have lost a partner (spouse, civil partner, or cohabiting partner) due to a work-related disease or accident. It is designed to help to ease the financial burdens after a partner’s death. Bereavement Support Payment is not means-tested, so you can claim it no matter your income or working status.

You may be eligible for Bereavement Support Payment if:

  • Your partner died because of a workrelated accident or work-related disease
  • You were under State Pension age when your partner died
  • You were married to your partner, in a civil partnership with them, or living with them as if you were married
  • Your partner paid a certain amount in National Insurance contributions

Bereavement Support Payment amount:

How much you will receive depends on your living circumstances. You may receive either:

£3,500, followed by 18 monthly payments of £350

or

£2,500, followed by 18 monthly payments of £100

 

How to claim for Bereavement Support Payment:

Apply online

or

Call the Bereavement Service helpline at 0800 151 2012

or

Download the Bereavement Support Payment form and post it to the address on the form. You will need to make a claim within 3 months of your partner’s passing to get the full payment. 

Council Tax Reduction

Council Tax Reduction or Council Tax Support applies to those who are on low income or claim certain benefits.

You may be eligible Council Tax Reduction if:

You are on low income or claim certain benefits

Council Tax Reduction amount:

Up to 100% reduction on your council tax bill

Your reduction depends on where you live, your income, whether you have dependents, and any other benefits that you receive.

How to claim for Council Tax Reduction:

Apply online to your local tax council

Health Benefits

The NHS offers assistance with certain medical costs, especially to older people and those with health conditions or disabilities.

This assistance includes free eye tests, free pharmacy prescriptions, and free dental care amongst other benefits.

Check to see what NHS health benefits you qualify for.

Travel Benefits

If you have a disability or are over the age of 60, you may be eligible for discounted public transport services.

If you are over the State Pension age in England, you can get a bus pass for free travel.

If you live in London and are over 60, you can get a 60+ London Oyster card. This entitles you to free travel within London on buses, trains and other public transit systems.

Apply for bus passes

You may also be eligible for a Senior Railcard, which gives you discounts on train ticket prices.

For more information, click here

If you have a disability, ask your local council if you can get a discounted bus pass.

It is also worth checking with individual transport operators to see if they offer discounts to older people or people with disabilities.

TV Licence Discounts

If you are 75 or over and receive Pension Credit, you can get a free TV licence. If you are blind or live in residential care, you can get a discounted TV licence.

For more information or to apply for your TV licence discount click here

Carers UK: supporting and connecting family and non-family carers across the UK.
https://www.carersuk.org

Age UK: Charity dedicated to supporting older people 0800 169 65 65.

Citizens Advice: providing free advice on a range of topics, including how to check which benefits you are eligible for and help with bills and living costs.
0800 144 8848
https://www.citizensadvice.org.uk

Hourglass: Free helpline for anyone concerned about elderly abuse.
0808 808 8141
https://wearehourglass.org

Solicitors for the Elderly: Independent national organisation of solicitors who specialise in a range of legal issues affecting older people.
0844 567 6173
https://www.sfe.legal/public

Need a bit more help?

Useful Information & Contact Details

Here are some useful websites and contact numbers for organisations that support older people and carers.

If you need to clarify something or have further questions, contact our Christies Care Team. We are more than happy to assist you.

Contact us