How to care for your ageing parents: a financial guide

It can often come as a shock when the tables turn and your parents, who have looked after you your whole life, become the ones who need looking after.

Another shock can be the care costs for an ageing relative. You can soften the blow by being prepared.

In this guide we look at how you can care for your ageing parents.

This article covers:

• What do you need to do first?
• What types of care are available?
• What funding is available?
• What government support is available?
• Will we need a power of attorney?

Getting started

The best place to begin is simply by sitting down and having a frank discussion with your parents.

Try to do this before you start to notice any physical or mental capacity changes that may affect their ability to care for themselves.

Unfortunately that may not always be possible, but if you can address a number of key financial issues now:

• One of the main issues to address is how your parents plan to fund any long-term senior care that they might need in the future.
• The last thing you want is for the financial burden to fall on you and other family members.
• If you have siblings, ensure that they are also involved in these discussions and that any future senior care responsibilities are arranged fairly.

You need to be realistic about the level of care and financial support you will be able to provide, bearing in mind your own family commitments and career needs.

What types of care are available?

As soon as you notice that your parents are struggling, contact their local authority to get a free needs assessment to see how much support they are entitled to.

Understandably, most older people prefer to stay in their homes. However, this may not be the best option or the cheapest.

For home care, or domiciliary care as it is also known, the UK Homecare Association recommends:

• The minimum rate of £23.20 per hour if local authorities are paying for care at home (£29.90 in London).
• For a night-time care at home service, expect to add on between £1 and £5 per hour.

For 28 hours a week, at £21.43 an hour, home care will set older people back almost £34,000 a year on average.

A live-in service providing full-time senior care usually costs between £41,000 and £65,000 a year.

It can be upwards of £85,000 for those with more complex needs, such as older people with dementia.  

The care costs vary widely around the country and between care companies and different types of senior care services:

• London and the south-east: most expensive regions for care homes in the UK: you can expect to fork out over £6,000 more than the national average, according to the same survey. 

What is right for you and your ageing parents depends on a number of factors, of which care cost is just one. You need to weigh up all the pros and cons when making a decision. 

For care homes, you will need to consider issues like:

• Loss of independent living
• Care costs
• Moving away from a place that they know
• Moving away from where they have a support network, and the variable quality of senior care.
• Staying at home, however, means your ageing parents won’t benefit from shared living communities or, unless you employ a live-in carer, being looked after by the same staff member.

Read more: What are the costs of caring for an older relative at home?

It may be that you choose to take responsibility for the care of your parents yourself.

This is something that you need to consider very carefully first, taking into account the financial support and care you can give.

It is likely that you will still need help in the form of respite care so that you can take breaks and go on holiday.

Is there any funding available?

Whatever you and your family decide, long-term senior care of your parents is expensive. 

The government offers partial or full means-tested funding for those in residential care based on a person’s assets and savings:

• In England and Northern Ireland the threshold is currently £23,250 (rising to £100,000 from October 2025)
• In Scotland it is £32,750
• In Wales it is £50,000.

The family home is typically included in the “assets and savings” calculation: however if ageing parents are being cared for at home, the value is not counted.

The same is true if they enter residential care on a temporary basis or a partner is still living at the house while they move into care permanently.

If your parents do not qualify for government funding, and they do not have sufficient savings, investments, a property portfolio or a decent pension to cover the costs, then other options on the care costs that will have to be considered.

These include:

• Borrowing from family members
• Letting a room to a lodger
• Equity release
• Moving to a smaller home.

Read Pamela’s story here on how moving to a smaller house with her mother cut care home and childcare costs.

It may be useful to seek advice from an independent financial adviser that specialises in long-term care. Have a look at the find an adviser search on the Society of Later Life Advisers site.

Read more: How to cope financially with a career-threatening illness or disability

Government support

There is help available to both carers and their elderly relatives. These include:

• Disabled facilities grant: a means-tested grant for changes to be made to the homes of those with disabilities so they can continue living there. Examples include fitting hand-rails, widening doorways and converting downstairs rooms to bathrooms. In Northern Ireland the maximum grant is £25,000, rising to £30,000 in England or £36,000 in Wales. Funding in Scotland is offered once an assessment has been carried out and is payable at 80% or 100% of the care cost.

Non means-tested benefits include:

• Attendance Allowance: this is for those over state pension age who need extra help to stay independent at home because of an illness or disability. It is paid at two rates depending on senior care needs: £61.85 a week or £92.40 a week for the 2022-23 tax year. Older people who receive this benefit may also qualify for a £10 Christmas bonus.
• Personal Independence Payment: this benefit includes help with some of the extra care costs of long-term ill health or disability and is for people aged between 16 and state pension age. PIP is made up of two parts – daily living and mobility – and each can be paid at either a standard or enhanced rate, with the total someone can receive ranging from £61.85 to £92.40 a week. The amount depends on how a condition affects someone, and not the condition itself.
• Carer’s Allowance: if you spend at least 35 hours a week caring for your parent and they are in receipt of disability benefit, then you can claim £69.70 a week. You can keep working but you must earn less than £132 a week after tax.

Adults with long-term intense, complex or unpredictable healthcare needs may qualify for free social care and receive full NHS funding, known as NHS continuing healthcare.

Care is provided at home or in a nursing home and, unlike local authority funding, it is not means-tested. For more on this, have a look at this NHS guide.

Eligibility must be assessed by a team of healthcare professionals and the outcome will depend on individual needs and not on any particular diagnosis or condition.

A decision should be made within 28 days of an initial assessment.

The process can be complex and you may wish to appeal if your relative is turned down for funding.

Beacon is an organisation offering free independent advice on this and everything else related to NHS continuing healthcare.

Will we need a power of attorney?

Once you have worked out the type of senior care your ageing parents may need and how it will be funded, there are day-to-day expenses that should be considered.

Set up a Lasting Power of Attorney (LPA). This will enable anyone of sound mind who is over 18 to choose at least one other person to manage their financial tasks.

So it is important your parents set one up while they have the mental capacity to do so.

An attorney is given:

• Legal responsibility over paying bills
• Benefits and pension payments on someone else’s behalf
• The management of their bank account and even selling their home – so it needs to be someone trustworthy.

You can set up a Lasting Power of Attorney (LPA) to deal specifically with health and welfare. It is straightforward and relatively cheap to organise.

There are different systems in place for those who live in Scotland and Northern Ireland.

If you need to set up a Lasting Power of Attorney, you must have a certified copy. Show it to any organisation like a bank or local authority that you need to deal with.

It is never easy to watch your ageing parents struggle to care for themselves. It can also be a difficult time for the entire family.

Taking on the responsibility can also have an impact on your career, your finances and your family life. It is something that needs to be thought through carefully.

Setting plans in place as early as possible and doing your research can help. 

For more information on this and other concerns, Age UK is a good resource for financial support and advice.

Read more: ‘My PIP was stopped when I was in hospital – what can I do?’