Paying for a care home in Herefordshire
Let your property pay your care home fees for life
The Care and Home Inheritance Plan
The Care and Home Inheritance Plan is a unique solution for paying for residential care without selling your home.
The Care and Home Inheritance Plan enables you to move into the residential home of your choice while retaining ownership of your property. The house can then still form a part of your estate at the end of your life, providing your children or grandchildren with a valuable inheritance.
Shaw Lifetime Care packages all of your care associated costs, including your care home fees, into the Plan which is repaid over time using rental income from the property.
Continue reading to see how the Care and Home Inheritance Plan stacks up against other options when it comes to self-funding your care as a property owner.
Compare Your Options
You may choose to sell your home, take out a lifetime mortgage, or enter into a Deferred Payment Agreement (DPA) with your local authority in order to raise the funds to pay for a residential home. All of these options require the house to be sold at some point in the process and can incur large costs.
With a Care and Home Inheritance Plan, you retain ownership of your home and your beneficiaries can inherit the home with the added benefit of growing house prices.
| Your options | Your costs could total |
|---|---|
| The Care and Home Inheritance Plan (CHIP) | £0 |
| Sell your home now | £144,500 |
| Lifetime Mortgage | £144,500 |
| Deferred Payment Agreement (DPA) with the Local Authority | £144,500 |
Cost Breakdown
| Your typical costs | With a CHIP | House sale, lifetime mortgage, or DPA |
|---|---|---|
| Care Needs Assessment | (£500) | - |
| Repairs to home | (£3,000) | (£3,000) |
| CHIP Fee | (£4,000) | - |
| Legal and financial advice | (£3,000) | (£3,000) |
| House sale and associated costs | - | (£9,500) |
| Care fees contribution over your lifetime in a care home | (£120,000) | (£120,000) |
| Interest | (£9,000) | (£9,000) |
| Total costs | (£139,500) | (£144,500) |
| Repayment of costs from renting out the property | £139,500 | £0 |
| You pay | £0 | £144,500 |
| Enhancement of Equity through house price inflation | £70,000 | £0 |
These figures are typical where:
The contribution needed to help pay care home fees could be £40,000 a year for three years. The rest of the care home fees are assumed to be paid out of the customer's pension(s).
The value of the customer’s home is £300,000 (average UK home value.)
The Costs Explained
Care Needs Assessment
This assesses your care needs and mental capacity. This assessment is free from the Local Authority, but you may have to wait some time to receive it. The CHIP offers an assessment within six days at cost of £500 which can be funded by the CHIP.
Repairs to Home
Some repairs/improvement work is usually required before a home can be safely let. Also, repairs are often needed to get the best price if/when selling the home.
Legal and financial advice
Each option involves placing a charge on or selling your house and a solicitor must be engaged. You may also choose to purchase financial advice.
Cost of care fees contribution over your lifetime in care home
In this example, the customer lives for three years and the top up that has to be funded in addition to pension income is £40,000 x 3 years.
Interest
The funds to pay the top up each month are borrowed against the house both with the CHIP and the lifetime mortgage and these incur interest charges.
Repayment of costs from renting out the property
The CHIP arrangement can be terminated any time after four years. If the CHIP is terminated before rent has repaid all the costs, there will be some costs to repay. If the CHIP runs to term, then all care costs are repaid AND the beneficiaries also get the benefit of house price increases.New Paragraph
Herefordshire Council is satisfied that Shaw Lifetime Care provides these services, and that Shaw Foundation which owns Shaw Lifetime Care is registered as a Not-for-Profit organisation with the Financial Conduct Authority (25164R) and as an exempt charity with His Majesty’s Revenue and Customs (ZD12877). However, this product is not endorsed by Herefordshire Council and you must seek your own independent legal, financial and property advice before entering into any arrangement.