Understanding the Funding Gap
Navigating the financial landscape of UK care homes is complex. Most residents rely on a combination of state support, private pensions, and personal capital (savings or property). The 'Funding Gap' is the weekly deficit that must be covered by liquidating assets or using a Deferred Payment Agreement (DPA).
How the Calculation Works
This tool calculates your total weekly income from all sources and subtracts it from the average weekly fee of your preferred care home category. It then factors in the 'Capital Erosion Rate'—how quickly your savings will be depleted if you have to self-fund the difference. By inputting your current savings, you can see exactly how many months or years your current capital will last before reaching the local authority funding threshold.
Acting on the Result
If the result shows a significant gap, you may need to consider:
- Local Authority Financial Assessment: If your capital drops below the threshold, you may qualify for state support.
- Deferred Payment Agreements (DPA): Some local authorities allow you to delay paying for care until your property is sold.
- Care Home Selection: Adjusting your search criteria to homes that better align with your sustainable budget.
Always seek independent financial advice from a SOLLA-accredited advisor before making significant decisions regarding property or long-term care funding.