How living with a disability may affect your finances

Article written by Kellands Hale, our preferred independent advice firm.

This article is not intended to be financial advice to any individual. The views expressed are those of the author and Moneyfactscompare.co.uk does not endorse the content.

In the UK, there are several measures in place to ensure those with disabilities are not financially disadvantaged. However, this aid may not always cover exactly what a person needs – and unfortunately, this may mean that living with a disability has an impact on their finances.

If you or someone in your family is living with a permanent disability, or becomes temporarily impaired after a health event, it is crucial to understand:

• The potential impact that developing a disability may have on your money
• The financial aid that might be available, even to those with significant wealth
• The help and support that a financial planner could offer to those living with disabilities.

Nearly one-fifth of people in England are living with a disability

According to the Office for National Statistics (ONS), the 2021 Census revealed that 17.7% of people in England and 21.1% of people in Wales were disabled.

In England, 7.8% of women and 7.1% of men said they were limited “a lot” by their disability. Understandably, the largest proportion of those with lived experience of disability were over 70 years old.

Although the overall percentage of people living with disabilities has decreased since 2001, the ONS says it is important to remember that nobody is immune to disability.

So, even if the following information does not apply to you right now, gaining an understanding of the financial aspects could prove invaluable for yourself, a friend or a family member in the future.

How a disability can impact your finances

Living with any form of impairment could cause your money to be depleted more quickly.

While there are support measures you may be able to access, we outline four ways that your wealth could be negatively affected by a disability.

1. Working part-time or stopping work altogether

If you began living with a disability through an illness or injury, your working life may change as a result. This could include reducing your hours, changing jobs to suit your accessibility needs, or even stopping work altogether.

If your spouse or another dependant also needed care, you might reduce your working hours to assist with this and face a reduction in income as a result.

2. Modifying your home to fit your needs

Designing your home to better take care of your needs could require serious financial commitment. For instance, if you began using a wheelchair, you may need to renovate your home to accommodate this.

Similarly, a person living with a cognitive impairment could require additional measures at home to improve their safety, including introducing labels to cabinets and doors, for example.

The cost of modifying your home to accommodate your disability needs can vary widely, depending on what is required.

3. Taking transport

Living with a disability may mean you are unable to drive a car or take public transport. As such, you might rely on taxi services to get around.

4. Paying for care

If you or a loved one needed help day-to-day, you might consider employing care staff to help with your needs. There is a wide range of care available in the UK, from supported living facilities to at-home care.

According to Age UK, the cost of at-home care typically sits at £25 an hour. As such, employing a full-time carer could cost tens of thousands of pounds a year, which may place financial strain on your family if you were to fund this yourself.

Alternatively, carehome.co.uk says that, as of January 2024, the average weekly cost of live-in care is £760 for residential care, and £960 for nursing care.

Of course, these are significant expenses to take on, but there are funding options available that could help cover some (or all) of the care that you need.

Accessing financial support

There are several financial support measures that disabled individuals in all wealth brackets may be able to access.

Both your local council and the NHS have measures in place to financially support those living with disabilities. While some are means-tested, others are not, so even those with significant wealth may be able to gain Government funding to help support themselves or a loved one with a disability.

The benefits you or a loved one could access include:

• A Personal Independence Payment (PIP) to help fund extra living costs, such as taking taxis if you were unable to drive. You may be eligible for PIP even if you are employed and have other savings.
• The Employment and Support Allowance (ESA) if you are under State Pension Age and have an impairment that affects your ability to work. The ESA is available for both employed and self-employed individuals.
• The Attendance Allowance which provides funds for those over State Pension age who have a disability that requires someone else to help them with daily tasks.
• The Disability Living Allowance (DLA), providing additional funding to families who have a child, or children under the age of 16, living with disabilities.
• The Carer’s Allowance if you care for someone for more than 35 hours a week who receives State Benefits for their disability.

These are just a few of the several forms of funding for which you might be eligible.

It is important to note that your impairment does not have to be permanent to receive funding. Those who may be able to access these support measures range from:

• Those who are diagnosed with cancer or another serious illness
• Someone recovering from an injury that has affected their health
• Stroke survivors, and those living with acquired brain injuries
• Those with reduced mobility
• Anyone diagnosed with a mental illness that affects their ability to work or care for themselves.

Government support

There are two key sources of Government support you could explore: your local council and the NHS. Let’s look at the two forms of long-term support in more detail.

1. Local council support

Your local council may offer means-tested social care funding through direct payments. According to the Care Act (2014), individuals have the right to request an assessment for direct payments from their local council.

A direct payment consists of a lump sum paid annually to you or your loved one, which could enable you to:

• Modify your home according to your requirements
• Hire carers to support you
• Acquire appropriate transport, like a Motability Scheme vehicle.

If the person who needs the direct payment does not have cognitive capacity, or is under the age of 16, either their parent or another representative (like a spouse) can request an assessment on their behalf.

The rules around what you can spend a direct payment on, and how they work, are complex and vary between constituencies. For instance, you could employ a family member as a carer in some instances, whereas this is not allowed in some cases.

Importantly, these financial assessments are means-tested. So, if you have more than £23,250 in capital or income, you are likely to need to self-fund the entirety of your care.

However, if someone in your family does not meet the capital threshold, and developed a short- or long-term need, they could qualify for a direct payment from their local authority.

2. NHS Support

The NHS offers financial assistance without means-testing through its continuing healthcare framework, which aims to prevent individuals with long-term complex health needs from facing financial hardship.

If you or a loved one are living with a long-term disability or illness, you can request a continuing healthcare assessment through your GP. An assessor (usually a doctor or nurse) will normally visit you at home and look at your needs under their assessment guidelines, which include:

• The amount of daily care you may need from a registered nurse
• Complex pain management elements
• The amount of medication you need
• The predictability of your symptoms
• Your physical and psychological wellbeing.

If you qualify as having an assessed need, you may then be provided with either:

• Commissioned care, meaning that the NHS sends nurses and other medical staff directly to your home or other place of residence at the appropriate times.
• A personal health budget, which would enable you to hire your own care staff on a schedule that suits you.

The continuing healthcare framework is designed for adults. For children with disabilities, there is a separate “continuing care package” with different rules attached to it.

Remember: these assessments are not means-tested. Whether you have £100 or £1 million, if the NHS determines that you have long-term care needs, you may be eligible for full care funding.

Although not everybody is eligible, being assessed for continuing healthcare funding may enable you to receive long-term support from the NHS that means you do not have to deplete your assets over the years.

A Kellands financial planner could help

Our financial planners offer long-term wealth planning solutions to families with a wide range of needs.

We can help you put financial protection in place now, so that a life-changing health event may not have as great an impact on your money after the fact. Plus, our planners can talk you through funding options and help you manage a package of support if you were to receive it.

If you would like to learn more about anything you have read in this article, contact us to speak with a financial planner. We’re here to help.

Email us at hale@kelland.co.uk, or call 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.