How To Avoid Selling Your House To Pay For Care
Looking at how to avoid selling your house to pay for care, the common misconceptions and whether or not you can be forced to sell your house...
There comes a point in everyone’s life where we need that extra bit of help, whether that be going into a care home or receiving care in your own home. This is easier said than done, with the fees for care being a rather large sum of money.
Large sums of money aren’t exactly easy to access, unless you are to sell your house…
BUT many people don’t want to sell their house to pay for care, leading to frantic searching of ‘how to avoid selling your house to pay for care’ – which is probably how you’ve ended up here!
We’re going to talk you through how to avoid selling your house to pay for care, as well as the common misconceptions and whether or not you can be forced to sell your house…
How much are care home fees?
The cost of care home fees will differ depending on the type of care home you need. A residential care home is much cheaper than a nursing care home, as the level of care given in a nursing care home is higher and more specialist.
To give you a better idea, we have detailed the average weekly and monthly costs of the two different types of care home…
Average weekly cost of care (across the UK):
Residential care home - £704
Nursing care home - £888
Average monthly cost of care (across the UK):
Residential care home - £2816
Nursing care home - £3552
If you feel you can stay in your own home and need carers to visit weekly, then the price will be much lower. However, if you’re to start needing carers to visit you daily, the price will stack up and can actually become higher than what you would pay for living in a care home.
Your local authority will make you undergo a financial means test to see whether or not you qualify for some financial support for paying for care home fees and care at home.
The means test will look at the total of your savings and assets, and if they’re below a certain threshold, you will qualify for support. The thresholds across the UK are:
|Location||Saving and asset Threshold|
This means, if you’re in England, and your savings and assets are above £23,250, you will not get any help with paying for your care. If your savings and assets are between £23,250 and £14,250, you will get some help with paying for your care fees. If your savings and assets are below £14,250, then the local council will completely pay for your care.
It’s quite hard to get your care paid for, as if you’re going into a care home and therefore there’s no longer anyone in your home, this will get counted as part of the means test and so is likely to make your savings and assets way over the threshold to receive any help – which is often why people sell their homes as they need the money to help pay for care.
What happens to pensions when you go into care?
If you’re going into a care home you will still be able to receive your state pension, but it may affect the amount of financial help you may be eligible for when asking for it to pay for care fees.
If you’re a self-funder (in other words, you’re paying for the full amount yourself), then you will be able to continue to receive your state pension as normal.
If you’re receiving some financial help from the local council, then your state pension will be counted as income when it’s being decided how much help you should receive to pay for care fees.
Your pension will be used to pay towards the care home fees, but you will also have a ‘Personal Expenses Allowance’ (PEA), which is a set amount which is excluded from your pension to make sure you still have an income each week.
The amounts of PEA you can receive are below:
England - £24.90
Northern Ireland - £26.33
Scotland - £28.75
Wales - £29.50
This amount can be increased in certain circumstances, for example if you need to support a partner.
Your private pension will be affected in a similar way, but if you move into a care home permanently and have a partner living at home, you’re able to choose to pass half of your private pension to them.
This then means when you’re having a means test to see how much financial help you can be offered, 50% of it won’t be taken into account.
How to avoid selling your house to pay for care
Many people don’t like the idea of selling their house when going into care – whether that’s because the care is only temporary respite or because there are emotional bonds with the house.
Before we tell you how to avoid selling your house to pay for care, we’re going to debunk the common misconceptions, which could result in you getting into a bit of trouble…
Common misconceptions on how to avoid selling your house to pay for care:
Transfer the ownership – People often think to get their capital below the threshold, so they don’t have to pay for care, that they can just transfer the ownership of their house to someone else and therefore it won’t get counted in the means test. However, unless you were to transfer ownership of your property years in advance, the government will see you transferring the ownership and will therefore still count the property in the means test
‘Hide’ some money – Even if you were to try ‘hide’ some money or not tell the full truth about the extent of your savings, it will be tracked and found during the means test, meaning you will have to have a second means test including this sum of money
Gift or spend large amounts of money – Another method which some may think will help them to get below the threshold to avoid paying for care, is gifting or spending large amounts of money to help lower their capital. Once again, the government will notice this or flag it as suspicious and therefore the amount will still be included in the means test
All of the above methods are known as ‘deprivation of assets’, as money has been purposefully moved to avoid it being counted in the financial assessment. If the local council thinks that you have done this deliberately, then, as we mentioned earlier, they will calculate the value of your assets including the items/money that you no longer have.
How to avoid selling your house to pay for care:
Get care in your own home – If you receive care in your own home, your house won’t be included in the means test and so will make you more likely to be below the threshold so you can receive help to pay for care. It also means you’re only paying for the care, unlike in a care home where you pay for the accommodation as well. BUT, if you do require 24-hour care, it may end up being more expensive to stay at home and so it’s worth doing the maths to work out the best option
Have a ‘qualifying dependant’ live in your house – If you go into care but have a qualifying dependent live in your home, then no one can be forced to sell the home to pay for care. A qualifying dependent can be:
Your civil partner
Your unmarried partner
A close relative under the age of 16, who you’re legally responsible for
Your ex-spouse/partner if they’re a single parent
A close relative over 60
‘12-week property disregard’ scheme – This scheme means the local council will pay for the care home fees for the first 12 weeks of a person living there, if the person has a property with no one living in it. This means for the first 12 weeks; the local council will ignore the value of your house when deciding how much you need to pay towards your care home fees, giving you time to work out whether or not you need to sell your house to cover the costs. After 12 weeks, the value of your property will be included in your financial means test. This scheme is useful for people who will only be in care for a short period of time, for example for a bit of respite
Rent out your property – If you think you may need to sell your home to cover care home fees, you could first try renting it out to allow you to get some income, without needing to sell. However, it’s worth keeping in mind that you may not be able to rent your property straight away and there may also be times between tenants where you’re earning no income so may not be the safest option
‘Care fee will’ – This is a legal way of protecting your house for your family, if you need to be taken into a care home. A ‘care fee will’ will essentially protect half the value of your house. To do this, when owning a house with a partner/spouse you will need to specify that you want to own your house as tenants-in-common, which will allow you to specify in your will that you want to ‘gift’ your share of the property to your partner. This will mean, if you are to pass away and your partner needs to go into a care home, that only 50% of the value of the property will be taken into account when doing a financial means test
Can you be forced to sell your house to pay for care?
No one will ever force you to sell your house to pay for care, but it may come to a point where it’s your best option.
Selling a house to pay for care will mean that the value of your house isn’t included in the financial means test, potentially allowing you the chance to get financial support for the care home fees AND you’re able to release the equity from your house, to also use towards the fees.
When it comes to selling a house to pay for care, you have several options; through the open market; through auction; or through a ‘quick house sale’ company.
When thinking of selling a house to pay for care, the first method which probably comes to mind is through the ‘normal’ route of enlisting the help of an estate agent.
This route will entail an estate agent viewing and giving your property a valuation. This valuation, should you be in agreement, will then be the ‘asking price’ the house is advertised at on the open market. Once the property is advertised, interested parties will then arrange viewings and, should they be interested, will place an offer.
Offers placed have no guarantee of being at the asking price of the house and are likely to be subject to survey, meaning a buyer may choose to reduce their offer, or even withdraw their offer completely, after a survey has taken place, leaving you with a house to sell before being able to pay your care home fees.
Selling through the open market is a slow process, which isn’t ideal when needing the money to pay for care ASAP. Don’t panic, the next two options are much quicker options…
If you’re wanting a fast house sale, an auction could be something worth considering. At auction you will get serious buyers who are ready to exchange contracts and put down a deposit as soon as the hammer comes down on a deal. After auction, the buyer then has 20 to 28 days to complete, helping you sell your house to be able to pay for care more quickly.
However, a downside of auction is that buyers can and do pull out of the sale, forfeiting their deposit. Also, you will have to have several open days to allow potential buyers the opportunity to properly look at the property, which makes it more time consuming – probably not what you want when needing the money ASAP to pay for care.
Also, at auction, you have to cover your own legal fees and you have to pay a commission of the sold price to the auctioneer and pay for advertising and marketing costs, as well as room hire. The price your house sells at, at auction, can also be significantly below the ‘market price’, lowering the money you have to pay for care home fees.
The buying of your property will also be subject to a survey, meaning there are no guarantees that your property will sell at auction, and can take 6-10 weeks, meaning it’ll take longer before you receive your money needed to pay for care home fees.
Quick House Sale Company
Another option to help you release equity from your house to go towards your care home fees is to sell to a 'quick house sale' company. As the name suggests, they specialise in helping you sell your house quickly.
Quick house sale companies will give you a cash offer for your property, which is a guaranteed price and therefore means you have a guaranteed buyer. Your legal fees will be covered by the company and you don’t have to pay any commissions or fees.
Not only are you getting cash in the bank, but you’re also getting it in your bank quickly – meaning you will have the money ASAP to pay for your care home fees! Some quick house sale companies can have the property sold and cash in your bank in as little as 7 days.
Unlike on the open market and at auction, selling with a quick house sale company only involves one quick house viewing, to help ensure that the valuation and offer for your property is as accurate as possible. The offer you’re given may be slightly below market value, but the price you’re offered is the amount you’ll get in CASH!
If this sounds like something you may be interested in, you’re probably thinking ‘where can I find a quick house sale company?’
Here at The Property Buying Company, we’re a cash buyer of houses, buying any property in any condition, in as little as 7 days, all whilst covering your legal fees!
Our offer isn’t subject to a survey, and we only require one quick viewing to make sure our offer is accurate – we’re focused on getting you the money you need to pay for your care fees and FAST!
Our offer may be slightly below market value, but our average completion time is 2-3 weeks, meaning you can quickly sell your property and get the care you need. Our offer is a cash offer, meaning the price we quote is the price you’ll be paid!
We have over 50 years’ combined experience in the industry and countless good reviews on Trust pilot (feel free to check them out), meaning we really are a quick house sale company you can trust.
Why not give us a call or fill in our online form today to receive a no-obligation, CASH offer, to help get the money you need to pay for care.