Long Term Care

With increased life expectancy, it’s advisable, wherever possible, to factor potential care costs into any financial plans you have for the future.     

Is government support available? 

The support you may be entitled to varies across the UK.  

In England and Northern Ireland, any funding is currently based on the following capital limits: 

Under £14,250: you will be entitled to local authority support. You won’t have to contribute from your capital, but you will be expected to contribute from income in excess of the personal expenses allowance (PEA) which is currently £25.65 per week in England and £28.01 in Northern Ireland. 

Between £14,250 and £23,250: you will be entitled to some local authority support. You will have to contribute some capital (£1 per week for every £250 of capital between the lower and upper threshold), as well as income in excess of the PEA. 

The capital limits differ in Scotland, as shown below: 

Under £20,250: you will be entitled to the maximum level of local authority support. You won’t be expected to contribute from your capital, but you will be expected to use your income to help fund your costs.  

Between £20,250 and £32,750: you will have to contribute £1 per week for every £250 of capital between the lower and upper threshold and you will be expected to use your income to help fund your costs.  

Over £32,750: you will be obliged to pay for the full cost of your care. If you have under £32,750 in capital, but your income is considered sufficient to fund your care, you will also have to pay all of your fees.

If you live in Wales, a capital limit of £24,000 applies to non-residential care, and a limit of £50,000 applies if you need to have residential care.  

What does a means test include? 

When a local authority performs a means test, most of your assets and savings are treated as capital but your home is normally excluded under the following circumstances:  

• Your spouse or civil partner still resides in the property 
• A disabled relative resides in the property 
• A relative aged 60 or over resides in the property 
• A child aged under 16 resides in the property 
• The person is in the first 12 weeks of requiring long-term care 
• Their care needs are only temporary

Will giving my property away exclude it from the means test? 

The local authority is entitled to question whether or not you have transferred your property specifically to avoid it being included in the means test. There is no time limit for this.  

How much will long-term care cost? 

Costs are very different depending on whether you receive care in your own home or in a care home and also depend on how much support you need. 

Latest figures show a predicted average cost of a residential care home in the UK in 2025 will be £55,680 a year. On average nursing care will be an additional 22%. (Source: www.carehome.co.uk) These costs may not include things like day trips, hairdressing etc, so it’s important to check exactly what is included. 

Is a cap on care costs being introduced? 

In September 2021, Boris Johnson committed to cap lifetime care costs at £86,000 – although not including food or accommodation. He also planned to raise the asset threshold (the amount you can have before you receive council support for funding) to £100,000 and to pay for this with an additional National Insurance contribution known as the Health and Social Care Levy. 

However, the Levy was scrapped and other measures have been delayed until 2025 without much further detail. 

Planning for the cost of long-term care 

I can assist you in planning for the potential expense of long-term care, tailoring my advice to your individual circumstances.  

I can advise on the various funding solutions available to you, from purchasing an annuity (lifetime income) to investing in products that can pay an income to fund your care. It is also important to review any existing investments to establish whether existing or proposed withdrawals are sufficient and sustainable in meeting your care cost. 

If you’re facing the prospect of paying for your, or a loved one’s, care, then let me help you make the best choices. Just get in touch.  

Should you choose to invest your funds to achieve your care costs objectives, please note the value of investments may fall as well as rise. You may get back less than you originally invested. 

Think carefully before securing other debts against your home. Equity released from your home will be secured against it.