Know the rules before you need them. Understand what a local authority can count, what it may disregard and when it can challenge financial decisions.
What does care actually cost?
The cost of long-term care can be a significant financial commitment for individuals and their families. The amount depends on the type of care needed, the location and the care provider.
Recent average weekly fees paid by self-funders across the UK include:
Residential care: £1,298 a week
Residential dementia care: £1,343 a week
Nursing care: £1,535 a week
Nursing dementia care: £1,564 a week
At these rates, nursing care can cost around £80,000 a year. Over two years, the total could reach approximately £160,000.
For many families, this represents a substantial part of the savings and property wealth they had hoped to pass on to the next generation.
Understanding how care fees are assessed can help you make informed decisions about your finances and future care needs.
Who pays for care, and what is taken into account?
In England and Wales, local authorities carry out a financial assessment to decide how much someone should contribute towards their care. The rules differ depending on where you live and whether you receive care at home or in a residential setting.
Care fees in England
In England, the financial assessment looks at your capital, which can include savings, investments and certain other assets.
The main capital limits are:
Below £14,250: Your capital is not used to calculate your contribution, although income may still be taken into account.
Between £14,250 and £23,250: You may be expected to contribute through tariff income, calculated at £1 a week for every £250, or part of £250, above the lower limit, as well as an affordable contribution from your income.
Above £23,250: You will generally be expected to pay the full cost of your care, subject to the applicable assessment rules.
The Personal Expenses Allowance also means that someone receiving local authority-funded residential care must be left with a small amount of income for personal spending.
These figures can change, so it is important to check the current rules when planning.
Care fees in Wales
Wales has different financial assessment rules.
For residential care, the capital limit is £50,000. This means that people with capital below this amount may qualify for local authority support, depending on their circumstances and assessment.
A person receiving local authority-funded residential care must also be left with a minimum weekly amount for personal expenses.
For care at home, different rules apply. The value of your main home is generally disregarded, and there is a maximum weekly charge for eligible non-residential care. The capital limit for care at home is also different from the residential care limit.
It is important not to assume that the rules in England apply in Wales, or the other way around.
Can the local authority include your home?
Your property can be one of the most important considerations when planning for future care fees.
If you move permanently into residential care, the value of your home may be included in the financial assessment. However, there are circumstances where it must be disregarded.
For example, your home will generally be disregarded if certain qualifying people continue to live there, such as:
Your husband, wife or civil partner.
A qualifying relative who is aged 60 or over.
A qualifying relative who is incapacitated.
A child under 18 for whom you are legally responsible.
A temporary 12-week property disregard may also apply in certain circumstances when someone first enters permanent residential care.
If you receive care in your own home, the value of your main home is generally not included in the financial assessment.
The rules can be detailed, and the outcome depends on individual circumstances. Getting advice before making decisions can help you understand how they apply to your situation.
What about transferring property or putting assets into a trust?
There is a great deal of misleading information about care fees, particularly claims that transferring your home or placing it into a trust will automatically protect it from being used to pay for care.
This is not something that should be treated as guaranteed.
Local authorities have powers to investigate certain financial decisions made before someone receives care. This can include giving away money, transferring property or placing assets into a trust.
The authority may consider whether, at the time of the transfer:
You could reasonably have expected to need care and support.
You could reasonably have expected to contribute towards the cost of that care.
Avoiding care charges was a significant reason for making the transfer.
If the authority decides that a transfer was made to avoid paying care fees, it may treat the person as still having the asset when carrying out the financial assessment. This is often referred to as deprivation of assets.
There is no simple rule that says transferring your home seven years before needing care automatically protects it. The circumstances and reasons behind the transfer matter.
Honest advice matters
At Viva Planning, we believe people should understand the rules before making important decisions about their home, savings and inheritance.
We do not promote lifetime trusts or asset protection arrangements as a guaranteed way to keep property beyond the reach of a local authority.
If avoiding care charges is the main reason for considering a transfer or trust, we will explain the risks and the rules that may apply. We will not promise that an arrangement will achieve something it cannot guarantee.
What we can do is help you understand your options, explain how the financial assessment works and provide clear information about the decisions you may wish to consider.
Planning ahead is not about finding a guaranteed way around care fees. It is about understanding the rules, making informed choices and avoiding decisions made in a hurry when circumstances become difficult.
Contact Viva Planning to learn more about care fees planning and understand the options available to you and your family.
