If you’re trying to figure out how to avoid selling your house to pay for care, you’re not alone. Many of us dream of leaving our life savings and assets to our children and grandchildren. Yet, with the ever-increasing cost of care, particularly for residential care, many have no choice but to drain savings accounts and sell family homes.
Planning for care, whether for yourself or a loved one, is something we all need to do, especially as we get older. It’s rarely a pleasant conversation to have, as it can cause high emotions and stress. Nonetheless, planning for care is important if you want to make the most of your assets and lessen the emotional and financial burden later on.
If you are wondering how to avoid selling your house to pay for care, you might find this guide useful. We will take you through the different aspects of funding care, and the steps you can take to avoid selling your home.
Will I Need to Sell My House to Pay for Care?
Whether or not you will need to sell your house to pay for care depends on your individual circumstances. The answer can be yes or no.
The main reason for not being required to sell your home to fund care is if there is still a dependent person living in the property. This is crucial for many people, as it gives dependents the right to remain in their home, even if a member of the household has gone into care. For example, if you need to move into residential care, but your partner will still be living in your home, they will be under no obligation to move out.
In order to receive funding from the local authority to help with care costs, a means test will be carried out. This will take into account the value of your assets, including savings, pensions and property. If a dependent wishes to continue residing in your shared property, the house cannot be considered as an asset, so it won’t affect your ability to receive financial aid for your care.
Receiving Help with Care Costs
For most people, property is their most valuable asset. If you’re wondering how to avoid selling your house to pay for care, but you don’t have enough money elsewhere to fund it, you might feel concerned about your remaining options. So can you avoid selling your home and still receive financial support?
Yes, you can, but again, it really depends on your personal financial circumstances. It is your local authority who will handle your social care needs, and they will conduct a means test to work out if you need help funding it.
How means-testing works
The local authority will look at any regular income you receive along with your capital, including property assets, savings, business assets and investments.
In England, if your combined assets total £23,250 or more, you will be ineligible for support. Any amount below this, you will receive support, and if your assets are worth less than the minimum threshold of £14,250, you will receive the maximum support available. Note that in Scotland, Northern Ireland and Wales, the thresholds are slightly different.
It’s important to know that any shared assets will be divided. For example, if you and your partner share £50,000 in savings, only £25,000 will be considered in means-testing. Your partner will be able to keep their 50% share.
Deferred Payment Agreements (DPAs)
So, how can you avoid selling your house to pay for care? One such method is obtaining a DPA, a deferred payment agreement. If the capital in your house is liable to be used to fund your care, perhaps because there will be no dependent living there once you have moved out, you will have no choice but to sell up unless you obtain a DPA.
A DPA is an agreement you make with your local authority where you are loaned up to 70-80% of your property’s value to fund your care needs. When you pass away, the loan will be repaid from your estate. Some people prefer to arrange a DPA so that they are in no rush to sell their house to fund their care.
Receiving Care at Home
It might sound obvious, but if you continue to live at home for as long as you can, you can avoid selling your property. This certainly isn’t possible for everyone – remaining at home can present many challenges and often, people need the extra support they would receive in a residential facility. But if you’re desperate to work out how to avoid selling your house to pay for care, this is sometimes a viable solution.
Not only does receiving care at home reduce your outlay, since you do not need to pay for accommodation, but it also makes it far more likely that you will qualify for funding. As long as you remain in your property, it cannot be used in a means test; only your other assets and savings will be assessed.
Some people put off seeking professional care and support until they reach the point where they need to move into a residential facility. This is a hugely stressful emotional and financial burden. But if you organise care earlier, you might find that you can cope better financially at every stage, all the while making positive choices for your health and wellbeing.
When Selling Your House is the Best Choice
Selling a house due to ill health, even if that just means moving to somewhere more suitable, can be a worthwhile choice to make. It also helps safeguard your property assets for a loved one to inherit upon your death. By moving house, perhaps to a more accessible or affordable property, not only can you make day-to-day life much easier, but you may also be able to release some capital to help fund the care you receive at home.
If moving into full-time residential care is the best option for your health and wellbeing, you may have no choice but to sell your home to fund your care. At what is already a stressful time, you should ensure that the sale process is as simple and hassle-free as possible. Plus, you’ll probably want to save as much money as you can. That’s why you should consider a fast house buyer to handle your sale.
A specialist fast house buyer like Zoom is a regulated business that buys property fast, anywhere in the country and regardless of the property’s condition. A fast house buyer uses its own cash facility to fund the purchase, and it’s this that makes the process fast.
To speak to a member of our experienced team and find out more about our fee-free, quick and easy service, simply call 0333 880 4362.