What happens if you have no money for care in old age

[traytablestowed]

I'm asking hypothetically, because my relatives (currently in their late 60s) are likely to be in this boat at some point. They have no money and no assets (old car worth peanuts and they rent privately). I worry about what will happen if they need care later in life. How does this work in practice? Who pays?
Would really appreciate any insights. This honestly keeps me awake at night sometimes.

The council pays based on your assessed need and their ability to provide services.

The council will pay. My mum lived in a council house, didn't have any savings and lived off her old age pension. She was due to go into a home that the council were finding. We didn't have a lot a choice as to which one though.

What about the state pension payments? Would these be used to part-fund the care, or would they still receive it?

So currently, if people have over 23K they will be expected to contribute to their care, until the amount they have in the bank goes down to that amount. Otherwise, there are services that provide free /subsidised care for elderly people in their own home (which is most people's preferred option) and in care homes if their needs are such that care at home is not viable. Relatives are not expected to pay, and nor should they be expected to do so. It's worth checking out what is around in the area your folks live just for future reference and before it is needed. Although late 60's does seem quite young to me, at 67!

Your pension is used to contribute to your care.

In the case of a care home you get to keep about £25 per week for personal expenses.

As far as I remember you lose your pension as that goes towards your living costs in the home, but you get to keep a small percentage of it as pocket money. Also, you get put in a very basic understaffed home. This is what happened to my grandparents.

Yes I think they would if in a care home and then the person is left with a nominal sum. It used to be about £27 a week.

Sorry quite wrong person!

From what I remember and this was a few years ago so it might have changed my mum would only have got a v small weekly allowance. Presumably her pension would be going towards paying the fees.

Thanks everyone and sorry @retirementrocks I didn't mean to offend you! I don't think it's imminent for them in their 60s, but I worry about the future as their financial situation is only getting worse (rent keeps increasing, col, and they have now decided to give up their PT work also).

So the state would pay for care for one or both of them if it was needed? If one needed care and the lost pension meant that the other couldn't afford the rent - what happens then? Would other benefits kick in? Would they need to be in a council house (they aren't currently)?

If a person has less than £23,250 in savings (double that for a couple) then the LA will contribute on a sliding scale. If you have less than about £14k then the LA will pay in full if you are on low income.

The care package will be set up by the social worker following a needs assessment.

No matter what your income and savings, you may be able to claim Attendance Allowance, which isn't means tested.

If you need to go into a care home and have no savings and don't own your own house, the Council will pay.

This is in England - there are different arrangements for other areas of the UK

It is a valid worry. Can they comfortably afford their private rent?

Should such time come that they require nursing home placement, they would be assessed by social services (health/social care needs assessment), it is means tested and my understanding is that their pension would be accessed to part cover/contribute ( baring in mind, private nursing homes are in excess of £1000 weekly.

They may not qualify for nursing home placement though.

When the local authority do their financial assessments they take into account monthly expenditure e.g. rent, food, and bills before deciding if any contribution is required from income (once savings are down to £23k or below.

As others have said, with no assets and little or nothing in the way of their own savings then tha local authority will pay, although there will be little or no choice over which home to go into.

State pension stops being paid because it goes towards funding the care, except for a relatively small amount of pocket money each week, but if all food and everything else is provided by the home then that might be sufficient.

I don't think they can afford private rent to be honest, this is my secondary worry (even though it's probably more pressing) as we have thought about ways we could potentially help with this.
The care aspect worries me more because it is such a black box to me, but these replies have been reassuring (a bit reassuring anyway!)

I don't fully know the answer to what the person remaining in the property would get, but I would have thought that Housing Benefit and Universal Credit would kick in.

Research that though. I believe it to be the case but am not 100% sure.

The advantage of being in a council house is the rent is lower than private rents and the landlord is more likely to be willing to do their job and repair things. You can help them apply to the council and get bidding on properties. As they are adequately housed currently it might take ages for them to get somewhere, but equally it is likely to be quicker than someone younger I the same situation because your parents will have access to bidding on all the "old age" properties that young people aren't allowed to live in.

Neither of them will be out into a care home due to COL or inability to pay rent, instead they'd end up homeless and be put in temporary accommodation by the council, hostel/b&b/flat if they're lucky, until a permanent property comes up. As homeless they'd have higher priority for a permanent property than someone who is adequately housed already.

Universal credit is for people of working age. They could apply for this to ensure they're getting everything they could be. You can't be on UC and choose not to work though. Unless health prohibits it, you're expected to work. At retirement age they could apply for housing benefit and council tax benefit, it depends on income and rental rates. So there's a different rate for council housing because the rents there are cheaper. Maximum housing benefit will always cover the whole rent in a council property. In private rentals it's called local housing allowance. You can look up online what the maximum rate is in your area for the type of property they're eligible for (one bed flat for a single person or childless couple. "Child" means under 18 and living with them majority of time, nobody else counts). The LHA is set so you can afford something like the bottom third of private rentals in the area for that type of property. Unfortunately these cheaper properties will often be the mouldy ones or the ones with bad landlord/neighbors, they're also incredibly in demand and difficult to get. This means lots will be living in a property bigger or more expensive than they are eligible for. LHA therefore rarely covers the whole rent, even at the maximum amount. I mentioned the maximum amount because the amount of HB/LHA you're actually entitled to depends on your income.

There's a benefit calculator at "entitled to" website where you can put in hypothetical situation and find out what you'd be likely to get.

This is interesting. They don't assess the outgoings of people of working age when assessing what contribution is required towards their care. They make the assessment based solely on income and savings, they don't care what expenses a person has unless they can prove those expenses are specifically related to their disability. So not rent, utilities and general living costs.

Thanks @EleanorLucyG this is very helpful - I'll have a look at the potential entitlement tonight.

You get put in a home that the Council have an arrangement with that is within their financial limits. Its quality does not depend on its costs, or whether it has Council funded residents or not. An expensive home does not necessarily mean a better home.

And you won’t be put in a home until it’s no longer economic to support you in your own home, in practice when you need more than 4 care visits a day, or need overnight care.

When the local authority do their financial assessments they take into account monthly expenditure e.g. rent, food, and bills before deciding if any contribution is required from income (once savings are down to £23k or below.

Not in our local authority they don't. It's based on income and savings only.

At state pension age they could be entitled to pension credit (not universal credit) and housing benefit (either as a couple or as an individual if one of them is in a care home). It's certainly worth checking up even now, what their entitlement is. If one of them is under state pension age then it will be universal credit (which includes housing costs) and they would be expected to work/look for work or provide fit notes if under state pension age.

Why don’t you look into sheltered housing schemes for them?

Sorry, is it income based?? Or asset based? Re. The 23k??

As far as I understand after October 2025 the limit for self funding raises to something like £100,000