Planning for later-life care costs means thinking ahead about the support you may need, how it could be arranged and how your income, savings and property might be affected.
It does not mean assuming that you will need residential care, and it does not mean there is a guaranteed way to protect assets or avoid care fees.
Care needs, funding decisions and financial assessments depend on individual circumstances and the rules applying at the time. A sensible plan therefore focuses on flexibility, clear decision-making authority and maintaining enough financial security for your own wellbeing.
This guide explains the main areas to consider in England, including local-authority assessments, self-funding, NHS funding, property, Lasting Powers of Attorney and deprivation of assets.
What does planning for later-life care costs involve?
Planning for later-life care costs is not simply about estimating the price of a care home.
It may involve considering:
- the type of support you may prefer;
- whether care could be provided at home;
- your regular income and likely expenditure;
- your savings, investments and property;
- which benefits or funding routes may apply;
- who could manage your finances or make care decisions;
- the needs of a spouse, partner or dependant; and
- how your will and wider estate plan fit alongside your care arrangements.
The aim is to understand the possible routes and make informed choices without relying on promises about future costs or funding outcomes.
What kinds of later-life care might be needed?
Care and support can take many forms.
Depending on a person’s needs, options may include:
- equipment or adaptations at home;
- help with meals, washing, dressing or medication;
- regular home-care visits;
- live-in care;
- day services;
- supported or extra-care housing;
- residential care; or
- nursing care.
Some people need only limited support for a short period. Others have increasing or complex needs over several years.
Planning should therefore allow for change rather than being based on one assumed outcome.
Start with a care-needs assessment
If someone appears to need care and support, they can ask their local council for a needs assessment.
The assessment considers the person’s needs and the outcomes they want to achieve. It is separate from the financial assessment that considers how care may be paid for.
A needs assessment may look at matters such as:
- personal care;
- managing the home;
- nutrition;
- safety;
- mobility;
- maintaining relationships; and
- participation in work, education or the community.
Even a person who expects to pay for their own care may benefit from asking for an assessment, because it can clarify needs and available options.
How does the financial assessment work?
After eligible needs have been identified, the local authority may carry out a financial assessment, sometimes called a means test.
The assessment may consider:
- savings and investments;
- income, including pensions;
- certain benefits;
- property in some circumstances; and
- some allowable expenses and disregards.
The treatment of property and capital can differ depending on whether the person receives care at home or moves permanently into a care home.
For the 2026–27 financial year in England, the government’s upper capital limit is £23,250 and the lower capital limit is £14,250. These figures can change and should always be checked when care is being arranged.
Having capital above the upper limit will generally mean paying the full cost of chargeable social care, although other funding routes and free services may still be relevant.
Does the value of your home always count?
No. The value of a person’s main home is not automatically included in every financial assessment.
For care provided at home, the home a person occupies is normally not treated in the same way as capital available to fund residential care.
If the person moves permanently into a care home, the property may be included, but statutory disregards can apply. For example, the value may be disregarded where certain qualifying people continue to live there.
The precise outcome depends on ownership, occupation and individual circumstances. It is important to obtain an assessment rather than assuming that the house must be sold or will always be ignored.
What is self-funding?
A self-funder pays the full cost of their care, usually because their assessable capital is above the upper capital limit or because they have chosen arrangements beyond what the council will fund.
Self-funding can offer choice, but it requires careful budgeting.
Consider:
- the current weekly or monthly cost;
- likely annual fee increases;
- whether nursing care may become necessary;
- additional charges not included in the headline fee;
- how long accessible funds may last;
- what income remains available;
- whether benefits have been claimed; and
- when to contact the council before capital approaches the relevant limit.
Do not wait until savings are almost exhausted before asking the council about a financial assessment. The council will need time to assess needs, finances and the suitability of the existing placement.
What is NHS Continuing Healthcare?
NHS Continuing Healthcare, often called NHS CHC, is a package of ongoing health and social care arranged and funded solely by the NHS for an adult assessed as having a primary health need.
Eligibility is based on the nature, intensity, complexity and unpredictability of the person’s needs. It is not awarded simply because somebody has a particular diagnosis or lives in a nursing home.
The process may begin with an NHS Continuing Healthcare Checklist, followed by a fuller assessment where appropriate.
Where a person is not eligible for NHS CHC but needs registered nursing care in a care home, NHS-funded nursing care may contribute towards the nursing element of the placement.
Are some care services free?
Some support may be available without a financial means test, depending on eligibility.
This can include certain:
- equipment and minor adaptations;
- short-term reablement after illness or hospital discharge;
- NHS Continuing Healthcare;
- NHS-funded nursing care; and
- services required under specific mental-health aftercare provisions.
The availability and duration of support depend on the circumstances.
What benefits might help?
Depending on age, disability, care needs and living arrangements, benefits may include Attendance Allowance or other disability-related support.
Entitlement can affect the overall care budget and may sometimes interact with local-authority funding.
A benefits check from the council, an independent advice service or another appropriate organisation can help identify possible entitlement.
Can you avoid care fees by giving away your home?
You should not assume that transferring a home, savings or other assets will prevent them from being considered.
If a local authority concludes that a person deliberately deprived themselves of assets to reduce care charges, it may treat them as still owning the asset or seek recovery from the person who received it, depending on the circumstances.
The assessment can consider:
- whether avoiding care charges was a significant reason for the transfer;
- whether the person could reasonably have expected to need care; and
- whether they could reasonably have expected to contribute towards its cost.
There is no simple fixed time limit after which a transfer is automatically safe from consideration.
Gifting a home can also create wider risks involving control, tax, family breakdown, divorce, bankruptcy, death and the donor’s own future housing security.
Can a trust protect your home from care costs?
No trust can guarantee that a home or other assets will be excluded from a future care assessment.
Trusts can be appropriate for genuine estate-planning purposes, but they also create legal, tax and administrative consequences.
Where the main purpose of a transfer into trust is to reduce care charges, deprivation-of-assets rules may be relevant.
Be cautious of marketing that promises to make a home “untouchable” or guarantees that care fees will not be payable.
What are deferred payment agreements?
A deferred payment agreement may allow an eligible person to defer some care-home costs, usually secured against their property.
It does not make the care free. The deferred amount, interest and applicable charges are normally repaid later, often when the property is sold or from the estate after death.
Eligibility conditions apply, and a local authority should explain the terms, costs and available options.
Why Lasting Powers of Attorney matter
Planning for care costs is not only about having enough money. Somebody may also need legal authority to access accounts, pay providers or make decisions about residence and care.
A Property and Financial Affairs LPA may allow chosen attorneys to manage matters such as:
- bank accounts;
- household bills;
- benefits and pensions;
- investments;
- care fees; and
- property, subject to the authority and safeguards that apply.
A Health and Welfare LPA may allow attorneys to make certain decisions about care, residence and medical treatment once the donor lacks capacity for the particular decision.
Without a suitable LPA, relatives may need to consider a Court of Protection application. Read our guide comparing a Lasting Power of Attorney with deputyship.
Who should be involved in planning?
Depending on the circumstances, useful input may come from:
- the person who may need care;
- family members or trusted friends;
- the local authority;
- health and care professionals;
- an independent financial adviser with relevant care-funding expertise;
- a suitably qualified tax adviser;
- a benefits adviser; and
- professionals helping with wills, LPAs or property matters.
Different professionals have different roles. Care funding, investments, tax, benefits and legal documents should be considered together where they overlap.
Planning as a couple
For couples, care planning should consider the security and needs of both people.
Questions may include:
- who owns the home and in what shares;
- what income each person receives;
- whether one person would remain living at home;
- which savings are held jointly;
- whether both partners have LPAs;
- how the wills are structured; and
- whether one partner depends financially or practically on the other.
One partner’s care needs should not be planned in isolation from the other partner’s housing and financial security.
Review your will alongside your care plan
Later-life changes can affect whether your will still reflects your circumstances.
Review points may include:
- changes in property ownership;
- a move into supported or residential care;
- the death of a spouse, beneficiary or executor;
- a significant reduction in the estate;
- changes in family relationships; and
- new needs affecting a beneficiary.
A review does not necessarily mean that the will must be changed. It checks that the arrangements remain appropriate.
Read our guides to estate planning, reviewing a will after retirement and how often a will should be updated.
A practical later-life care planning checklist
- Think about the type of support and living arrangements you would prefer.
- List your income, savings, investments, property and regular expenditure.
- Check your entitlement to pensions and benefits.
- Understand the difference between social-care funding and NHS funding.
- Ask for a needs assessment when care needs arise.
- Request a financial assessment rather than relying on assumptions.
- Consider both types of Lasting Power of Attorney.
- Review your will and property ownership.
- Keep important financial and care information organised.
- Discuss your wishes with the people you trust.
- Avoid transferring assets without understanding all the consequences.
- Review the plan as health, finances and official rules change.
Common mistakes to avoid
Assuming a home must always be sold
The treatment of property depends on the care setting, occupation and applicable disregards. Obtain an assessment before reaching conclusions.
Assuming family members can manage everything
A spouse or adult child does not automatically have authority to manage accounts or make care decisions.
Waiting until a crisis
Planning is harder when care is urgently needed and mental capacity is uncertain.
Relying on guaranteed asset-protection claims
No responsible plan can guarantee that care charges will be avoided or that assets will be protected in every future circumstance.
Ignoring the person’s own quality of life
Estate preservation should not take priority over suitable care, comfort, choice and financial security during the person’s lifetime.
Planning for later-life care costs in Dorset
Brooks Wills helps individuals and families across Poole, Bournemouth, Christchurch, wider Dorset and West Hampshire understand how wills, Lasting Powers of Attorney and estate planning fit alongside later-life care considerations.
We provide calm, practical guidance in plain English. Where regulated financial, tax, benefits or specialist care-funding advice is needed, the relevant qualified professional should also be involved.
Learn more about our Later-Life Planning Services.
Brooks Wills is a member of the Institute of Professional Willwriters and the Society of Will Writers.
Call, message or book a consultation to discuss the documents and arrangements that may support your later-life planning.
Simplifying legacies, securing tomorrow.
This article provides general information for England and Wales. It is not legal, financial, tax, benefits or care-funding advice. Care needs, eligibility and charging outcomes depend on individual circumstances and the rules applying at the relevant time.
Frequently asked questions
Will I have to pay for my own care?
That depends on the type of care, your assessed needs, your finances and whether local-authority or NHS funding applies. A needs assessment and financial assessment can clarify the position.
What are the capital limits for social care in England?
For 2026–27, the upper capital limit is £23,250 and the lower limit is £14,250. These figures may change, so check the current rules when care is needed.
Is my home always included in a care assessment?
No. The treatment of the home depends on whether care is provided at home or in a care home and whether a statutory property disregard applies.
Can I give my home to my children to avoid care fees?
A local authority may treat a person as still owning an asset if it was deliberately given away to reduce care charges. Transferring a home can also create serious tax, control and family risks.
What is NHS Continuing Healthcare?
It is a package of health and social care funded solely by the NHS for an adult assessed as having a primary health need. Eligibility depends on the nature and complexity of needs, not simply on a diagnosis.
Why are LPAs relevant to care planning?
They allow chosen attorneys to make authorised financial or health and welfare decisions if support is needed. Without suitable authority, family members may not be able to act and a Court of Protection application could become necessary.
