Formula help please...

Vampyre

Vampyre

Vampyre

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Edinburgh
Bit reticent to put this on GD and I'm aware that I should be able to work this out for myself but here goes...

I'm currently looking at Care Home costs for an elderly relative and I'm struggling to get my head around the financing. They will be self funding and I'm trying to work out how long their current financial situation will keep them going.

What I need is a formula where I can plug in a monthly fee and it will work out how long they can afford to pay for it taking into account their current savings pot (and possibly their property value) and their current pension income. I know the capital calculation is easy it's when I try to take into account the income that I start to get confused.

Alternatively, if someone knows of a website that is already set up to calculate this I would appreciate being pointed in the correct direction.

Thanks in advance!
 
Work out the net monthly cost first: monthly care home fee - monthly pension income
Calculate total assets: Savings + property value

Divide total assets by net monthly cost to get how long they can pay for the care home fees in months. Divide that number again by 12 to get the answer in number of years.
 
Beaten by the above, but effectively something like this:

House = £200,000
Savings = £20,000
Monthly home cost = £4000
Pension/month = £2000

number of years of funds = (200,000+20,000) / ((4000-2000)*12))
= 9

Doesn't take into account things like compound interest though, e.g., from earnings on savings etc.
 
Thanks for your input but we're well past that stage, we've spoken to everyone that can be spoken to and we know what the funding options and availability are. Now what I'm trying to work out is how we're meeting these funding costs!

EDIT: Apologies, I was only notified about Quartz's post I didn't realise other people had replied as well :rolleyes: so thanks to everyone that has replied so far.
 
Last edited:
touch said:
Work out the net monthly cost first: monthly care home fee - monthly pension income
Calculate total assets: Savings + property value

Divide total assets by net monthly cost to get how long they can pay for the care home fees in months. Divide that number again by 12 to get the answer in number of years.
Click to expand...

Pho said:
Beaten by the above, but effectively something like this:

House = £200,000
Savings = £20,000
Monthly home cost = £4000
Pension/month = £2000

number of years of funds = (200,000+20,000) / ((4000-2000)*12))
= 9

Doesn't take into account things like compound interest though, e.g., from earnings on savings etc.
Click to expand...
Thanks for that, I did have the basics worked out but the addition of the pension income threw me somewhat..
 
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