27 December 2023

Living at sea to avoid care home costs - shorely you can’t be serious?

Lucy Butterfint Partner & Head of Wills, Estates, Tax & Trusts
Elderly people laid on deck chairs of cruise ship

If the average weekly cost of a residential care home is £760, while a seven-day cruise can be as little as £500, which would you choose?

A retired couple from Australia have been making headlines recently by deciding to avoid rising care home costs by booking 51 back-to-back cruises, so they are essentially living at sea!

While their actions might seem eccentric, concern about the long-term costs of residential care are rising around the world and, on the face of it, their decision adds up: at least for the short term.

Stay abreast of impending changes to care home costs

One in seven UK residents experience an estimated lifetime care bill of £100,000 or more. While the government has pledged to cap the amount individuals will have to pay throughout their lifetime - limiting the cost to £86,000 - the fact remains that this is no small sum.

Worse still, despite originally intended to be rolled out this October, the government have now delayed the crucial reforms until 2025, heightening the uncertainty for many.

3 in 4 over 65s live with a limiting health condition

Almost three-quarters (74%) of UK residents over the age of 65 live with at least one long-term health condition, with that number rising to 86% for those 85 years or older, according to Age UK.

With people living longer and health concerns front of mind, it’s little wonder that a growing number of older people are looking to invest in long-term care to ensure they can enjoy a better quality of life well into retirement. 

But who foots the bill for care home costs?

Help is available to cover care costs

Under the current rules, if you have less than £23,250 in capital (such as savings or equity), you’re entitled to support from the government. If you have between £14,250-£23,250, you’ll pay a percentage on your care, with the council paying the remainder. If your capital falls under this threshold, then you’ll only have to pay the costs outlined on your means assessment - with no extra fees.

If you have over £23,250 in capital, you’ll not be eligible for any financial assistance. You’ll be classed as ‘self-funding’ and will be liable to cover the full costs of your care personally for your lifetime.

It isn’t possible to give away or transfer assets for the purpose of avoiding care fees. This would be seen as a deliberate deprivation of capital. If you’d like further information or guidance on the cost of care for yourself or a loved one, get in touch with our Wills, estates, tax and trusts team.

Need help?

Contact Lucy to discuss this further.

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