3 expert tips on paying for care

Amid the stress and confusion of arranging care later in life, it’s easy to miss the financial support available to you, or get drawn in by promises that clever estate planning could reduce your costs.

However, by taking the time to learn about your options and seeking help from professionals, you can get support to navigate the difficult care landscape.

We asked three financial advisers who specialise in later-life care for their key advice on financing care. All are accredited by the Society of Later Life Advisers (Solla).

1. See if you're eligible for any benefits

Catriona Smith, independent financial adviser at Chase de Vere IFA Ltd, and member of the Solla Advisory Board:

'It’s worth looking at the obvious thing first, and seeing if you’re entitled to any state benefits you’re not currently receiving. For example, in Scotland, anyone who needs it is entitled to a contribution towards personal care. 

'If you’re over the state pension age, you might be eligible for pension credit and attendance allowance. Pension credit is available to those on a low income, while attendance allowance is not means-tested. If you get rejected on the basis you’re too wealthy – which I've seen happen – you can contest that decision. 

'Someone who is really unwell might be eligible for NHS Continuing Healthcare (CHC), so it's worth asking to be assessed. There is a decision-making process to determine whether the individual has a "primary health need".'

Pension credit

There are two parts to pension credit: guarantee credit and savings credit. 

Guarantee credit tops up weekly income to £218.15 for single people and £332.95 for couples in 2024-25, and is therefore limited to those whose income is below this level.

Savings credit pays up to £17.01 a week for a single person and £19.04 for couples. The amount you receive is reduced by 40p for every £1 by which your income exceeds the threshold (£189.80 a week if you're single, and £301.22 for couples).

Attendance allowance

Attendance allowance is paid at two different rates: £72.65 or £108.55 a week. This depends on the level of need rather than income.

You can access attendance allowance if you have a physical or mental disability that means you need someone to care for you, though you don’t necessarily have to currently have a carer to claim.

If you move into a care home and your place is funded by your local authority, you likely won’t be able to continue receiving attendance allowance.

Primary health needs

A primary health need, in terms of NHS CHC funding, could relate to one of a number of areas, such as breathing or mobility. 

NHS funding is based on medical need, and financial circumstance has no bearing on decisions made.

Anyone in a nursing care home with significant caring needs may also be eligible for NHS Funded Nursing Care (FNC). This covers additional nursing care needs, but not accommodation costs. There are two flat rates of £235.88 per week or £324.50 per week.

• Find out more: benefits for older people

2. Consider funding options for care in your own home

Mel Kenny, chartered financial planner at Radcliffe & Newlands Wealth:

'When money begins to run out to pay for care in your own home, you might think the only alternative is a care home. Instead, your local authority could be contributing towards the cost of home care through means-tested direct payments. 

'Even if these payments fell short, there is the ability to gradually release equity from the house using a lifetime mortgage, while keeping the local authority means-tested payments intact. However, this can be tricky to navigate and therefore independent financial advice is recommended.'

Direct payments

If you have a needs assessment with your local council and it decides you need support with social care and can't afford it all yourself, you’ll be given a personal budget. If that money is paid straight to you, instead of to a care home or another care provider, it’s called a direct payment.

Direct payments can give you the flexibility to arrange your care how you want – for example, allowing you to hire specific carers you already know.

Equity release

When you’re receiving care in your own home, the value of your house isn’t included in the assessment of your assets. 

Equity release is one option to release some of the value of your home while you still live there, but if you move to a care home you’ll need to sell your house and repay the loan.

Equity release won’t be right for everyone, and can be expensive if you don’t keep up with repayments due to the compound interest.

If you are interested in equity release, you’ll need to get financial advice from a qualified equity release adviser, ideally one who is independent, rather than restricted.

Is equity release right for you?

Speak to the experts at HUB Financial Solutions, they'll be able to help

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• Find out more: paying for care at home

3. Don't try to dispose of assets to qualify for funding

Samantha Gibson, senior wealth planner at Canaccord Wealth:

'If you’re wealthy, it is a mistake to give away your assets as a way of trying to qualify for financial support. 

'For example, legitimate inheritance tax planning strategies like putting a house in trust or gifting items under the seven-year rule might be viewed as deliberate deprivation of assets during the care assessment process. 

'Local councils are very aware of these strategies and are diligent when making assessments. If you have the means to pay for your own care, the best bet is to plan accordingly to do so.'

Deliberate deprivation of assets

If you apply for council funding, you’ll have a financial assessment for care to determine whether the value of your assets falls below the threshold (£23,250 in England and Northern Ireland, £32,750 in Scotland, and £50,000 in Wales) to become eligible for support. 

Deliberate deprivation of assets is when someone gives away money, property, or other assets to be eligible for local authority funding. The council will look back on previously owned assets to consider whether any disposals were deliberate.

In a case of deliberate deprivation of assets, you’d be liable to pay the costs you owed, regardless of whether you can still afford them. The council can recoup costs from both the person who disposed of the asset and the person who received it, and even go through court proceedings to recover costs.

• Find out more: can I avoid care fees by giving away property and assets?

Advice on your options

There’s no ‘one size fits all’ answer as to how to best fund later-life care, so to find a solution that suits your needs and financial situation, you might consider working with a specialist financial adviser.

Not all advisers are qualified to deal with later life care finance, but you can search the Society of Later Life Advisers (Solla) directory for accredited advisers in your area.

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