You could put your property up for sale and use the proceeds to fund your care if you’re:
- moving to a care home, and
- no one else is living in your property.
This approach can give you the benefit of releasing a large sum of money. You can then use this to cover your future care costs.
You should always take financial advice when you’re planning on selling your home to release funds for paying for care. Taking financial advice can help make sure the proceeds can cover your care fees for the rest of your life.
Selling your home can be a lengthy process. If you need to move into a care home quickly you may be able to get some help from your local authority. They can cover your care costs under a Deferred Payment Agreement, until the sale is complete.
If you get any means-tested benefits, they may be affected by you selling your home. This is because having a large amount of money in savings can mean you’re no longer eligible for certain benefits.
If you want home care instead of moving to a care home, you could consider downsizing. This can raise a lump sum that you can use to pay your future home care fees.
Alternatively you could consider a dedicated ‘extra care’ residential development. This type of housing is provided in a secure setting and offers residents help and care when it’s needed.
If you’re moving into a care home, or nursing home, selling can release funds to buy a rental property. This can provide extra income to help with care fees and allow you to leave a legacy for loved ones.
If you’re considering downsizing or selling, you should consider the costs of moving. And if you’re considering purchasing a rental property, think about:
- the ongoing investment needed to maintain your new rental property, and
- possible periods of non-occupancy when you’ll get no money from rent.
Using a reliable agent to let your property can help relieve you or your family of some of the burden of managing a rental property.
Advantages of selling or downsizing
- Selling or downsizing makes capital available to help pay for the cost of care fees.
- It’s usually more cost-effective than equity release as no interest is charged or accrued.
- It can provide the opportunity to live somewhere that might better cater for your needs – now and in the future. This can include moving to:
o a bungalow
o a serviced apartment in a retirement village, or
o sheltered housing. - Downsizing is a sensible option if fewer people will live in the new property – or you want home care.
- Moving into more suitable accommodation can bring other advantages you might not have considered, such as:
o an easier-to-maintain home
o better accessibility, and/or
o a possible reduction in the cost of care through modifications in the new property. - It can help you make sure you have an inheritance left over for loved ones.
Disadvantages of selling or downsizing
- Selling or downsizing can be a lengthy process.
- It can have an impact on any means-tested benefits you may currently receive.
- Not everyone wants to sell their family home – you might want to stay living in your current home.
- It may not generate sufficient funds, especially if you’re moving permanently into a care home or nursing home.
- If you downsize to buy a new home for your spouse or partner and you have any money left over from the sale of your home, it could affect the outcome of your local authority means test.
Can I delay selling my home?
You may be able to get a Deferred Payment Agreement from your local authority. You can only do this if there’s nobody else living in the property.
Under this scheme, the local authority agrees to help you with your care fees. The fees are repaid when your property is eventually sold.
Can I have time to sell my property?
If you have to sell your property to help pay for your care fees, you can get some breathing space. You can do this by accessing some local authority support called ‘the 12-week property disregard’.
With ‘12-week property disregard’, your local authority pays your care home fees for up to 12 weeks. They’ll only do this if the value of your savings and assets excluding your property falls below the savings threshold for local authority funding.
This 12 weeks can give you time to sell your property. If your property still isn’t sold after 12 weeks, your local authority may offer you a Deferred Payment Agreement. Under this scheme, your local authority will pay your care fees until your property is sold.
Finding people who can help
You may already have a trusted family solicitor and accountant. It’s also a good idea to take advice from a financial adviser who specialises in later-life planning.
If you do need a solicitor, you can contact Solicitors for the Elderly. This independent, national network provides specialist legal advice for elderly and vulnerable people, their families and carers.