This article examines the chances of you needing nursing care, and explores the main rules that apply if you need to pay for nursing care
- What is your disability-free life expectancy?
- How likely are you to need nursing care?
- Average costs of nursing care
- Paying for nursing care
What is your disability-free life expectancy?
On average, the UK population is living longer, as is shown by the chart below.
According to the Office for National Statistics, the average life expectancy for a man in the UK is almost age 84; for a woman in the UK average life expectancy is over age 86. Of course, this reflects the average, so half of the population can expect to live longer than these ages. While this is relevant, this does not tell you whether you are likely to need nursing care before you die.
Disability-free life expectancy
A more relevant statistic in terms of quality of life might be the length of time you can reasonably expect to live free of disability. The latest data from the Office for National Statistics suggests that for those already aged 65, men can expect 10.5 years disability-free; women can expect 11.2 years disability-free. This means the average man in the UK can expect to be free of disability to age 75, and the average woman to age 76.
Taking this a step further, on average, you can expect to live with a disability for some years afterwards. If you were the average person, a man would live with at least one disability for around 9 years, while a woman might live with at least one disability for around 10 years. Of course, you are not average, so your own circumstances will be individual
Therefore, on average in the UK:
- Men live to age 84, and develop their first disability at age 75, meaning they live with a disability for 9 years
- Women live to age 86, and develop their first disability at age 76, meaning they live with a disability for 10 years
Clearly, it is within this period of disability that you may require nursing care.
How likely are you to need nursing care?
The ONS estimates that, based on the 2011 census, the portion of the UK population aged over 65 grew by 11% between 2001 and 2011. Despite this, the numbers in care homes only rose by 0.3% in this period.
The study estimates that in 2011 3.2% of the over 65 population were receiving nursing care in a care home.
Of those in a care home, 214,000 were women, and 77,000 were men. Therefore women appear to be nearly 3 times more likely to require nursing care in a residential home than men. Most care residents are single, suggesting that having a partner enables you to put off needing to pay for nursing care.
Of course, many more people receive nursing care within their own home. The ONS estimates that 600,000 people were unpaid carers (up to 5.8% of the population aged over age 65), suggesting that care is often provided in the home first, and people move into care homes only when their needs become too acute, or they no longer have a partner able to provide nursing care.
Overall, it seems that 9% of the over 65 UK population was receiving nursing care either in their own home from a relative, or in a residential nursing home.
Length of time spent in care home
In 2012 the Centre for Policy on ageing estimated the average length of stay in a care home to be 20 months. A London School of Economics study estimated the average length of stay to be 2.3 years. The LSE data shows that 90% of care home residents have died within 6 years of admittance. Survival rates tend to be longer the earlier a person is admitted to a care home.
This is an important point when planning for nursing care costs. It appears likely that you should expect some additional cost within your own home if you require nursing care, followed by a more expensive period within a residential home, perhaps for a shorter period. Of course, individual circumstances will vary widely, making it difficult to accurately plan for nursing care costs.
Average costs of nursing care
Age UK statistics show the effect of gradual cuts in the provision of Local Authority nursing care, set alongside gradual increases in the requirement for care due to an ageing population. In 2006 1.2 million people in the UK were receiving support from social services; by 2014 this number had fallen to 850,000. Clearly, this has to be due to cuts in public services.
The Money Advice service (using 2014 figures) estimates the annual cost of a residential nursing home at £29,270, or £39,300 if nursing care is required. Click here to access a free nursing care fees calculator, showing expected results by region.
If you require nursing care in your home you should allow for costs between £11,000 to £30,000 per year.
Age UK has a vast amount of information on how to access nursing care, and how to make the decision between a nursing home and care in your own home.
Paying for nursing care
You will need to decide whether you will fund your own nursing care, or whether you will ask the Local Authority to contribute to your care costs.
Privately funded nursing care
We can help you establish whether your own assets are enough to pay for your preferred source of nursing care. Click here to see how we help people like you. In our experience, people often initially think about sheltering their assets from care fees, only to be faced with the practical reality that they prefer to receive the best nursing care regardless of the cost. If this is your position, you will want to be sure that you have enough assets to pay for your needs no matter what happens.
We can help you to plan for the anticipated increases in costs or nursing care, making some realistic assumptions about the future based on your own circumstances. This will help you to work out whether needing nursing care in the home or elsewhere will mean that you eventually run out of money. Clearly, this can be a source of reassurance if you have important health decisions to make.
Local authority help with nursing care costs
Your Local Authority will help you with nursing care costs, but only in strict circumstances. They will do an assessment of your care needs, which will be used to create a care plan, to determine whether you need residential care in a nursing home. Following this, they will work out a personal budget for your care needs, and finally will perform a means test on your income and assets to establish whether you are required to contribute to your care costs.
If you have significant ongoing healthcare needs, you may be able to qualify for free help from the NHS, called continuing care.
The Local Authority means test will examine your income and capital, including joint assets. If you live in your home with your partner this asset will be disregarded, but if you live alone it will not. Currently, you are allowed to hold capital of up to £14,250 without affecting your care fees. If you have capital over £23,250 you must pay the full nursing care fees. Your income will also be taken into account, and will interact with the capital rules.
You must be careful not to be seen to deprive yourself of assets which would be taken into account for your care fees assessment. Otherwise, the Local Authority will simply assume you still hold these assets.
The Care Act 2014
The Care Act was supposed to introduce a cap on care fees, but many of the provisions have been delayed until 2020. One important provision which is already in place is that the Local Authority cannot force you to sell your home to pay for care fees. However, they may place a charge on your property to recover this debt after your death.
If the provisions come into force from 2020, the cap of £72,000 will mean that this is the maximum you must pay towards nursing care needs. This figure may rise, and will not include daily living costs such as food and accommodation, which of course will be significant.
If you are already at the stage where you require nursing care, then using some of the resources listed in this article should help. If you are thinking ahead and want to plan for future nursing care fees then we can probably help via our Prosper service.
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About Dan Woodruff
Certified Financial Planner & Chartered Wealth Manager at Woodruff Financial Planning
Financial Planning helps you to navigate and anticipate significant life changes. I want to help you to ensure your money is managed wisely to give you the financial security that will fund the future and lifestyle that is important to you.