Funding Long-Term Care

Navigating the care funding system can be overwhelming. We help you understand what funding is available, what you'll need to pay, and the financial strategies that can protect your wealth while ensuring you or your loved one receives the best possible care.

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Understanding the care funding system

Care funding in the UK is split between the NHS and local authorities. Understanding who pays for what is the first step to planning effectively.

NHS Continuing Healthcare

If your care needs are primarily health-related, you may qualify for NHS Continuing Healthcare, which is fully funded. Assessment is based on the nature and complexity of your needs, not your financial situation.

Local authority funding

If you don't qualify for NHS funding, the local authority will carry out a financial assessment. If your assets exceed £23,250, you're typically expected to self-fund. Below this threshold, the local authority may contribute.

What does care actually cost?

Care costs vary significantly depending on the type of care, location, and level of need. Here are typical figures to help you plan:

Home care

Carers visiting your home for daily assistance.

£17–£30 per hour

Live-in care

A full-time carer living in your home.

£44,000–£55,000 per year

Residential care

A care home without nursing provision.

£30,000–£45,000 per year

Nursing care

A care home with qualified nursing staff.

£40,000–£58,000 per year

Funding strategies we can help with

Immediate needs annuities

A single lump-sum payment that secures a guaranteed, tax-free income for life to cover care costs. The income is paid directly to the care provider. This removes the risk of care costs depleting all your assets and provides certainty for the family.

Pension drawdown for care

If you have a defined contribution pension, it may be possible to use drawdown to fund care costs. Careful planning is needed to manage the tax implications and ensure the fund lasts.

Attendance Allowance

A non-means-tested benefit for people over State Pension age who need help with personal care. Currently worth £68.10 or £101.75 per week depending on the level of need. Many people who are entitled don't claim it — we'll check whether you or your family member qualifies.

Lasting Power of Attorney (LPA)

While not a funding strategy, having an LPA in place is essential. It allows a trusted person to manage your finances and make care decisions on your behalf if you lose the capacity to do so. We strongly recommend putting one in place while you can.

Equity release for care

Releasing equity from your property can fund care costs while allowing you to remain in your own home. This can be particularly useful for people who want to receive care at home rather than moving to a care home.

Frequently asked questions

What's the difference between healthcare and social care?

Healthcare (provided by the NHS) is free at the point of use and includes medical treatment, nursing, and rehabilitation. Social care (provided or arranged by local authorities) covers help with daily living activities like washing, dressing, eating, and mobility — and is means-tested, meaning you may have to pay.

What is NHS Continuing Healthcare?

NHS Continuing Healthcare (CHC) is a package of ongoing care funded entirely by the NHS for people with significant, complex, or unpredictable health needs. It's assessed based on your primary health need, not your diagnosis. If you qualify, all your care costs are covered — even if you're in a care home.

What is the local authority funding threshold?

If your assets (including savings, investments, and potentially your home) exceed £23,250, you'll typically be expected to fund your own care. Below this threshold, the local authority may contribute. Below £14,250, they may fund all your care. These thresholds are due to change under planned social care reforms.

Can my home be included in the assessment?

Your home is usually excluded from the financial assessment if your spouse, partner, or a dependent relative still lives there. If no one is living in your home, it may be included in the assessment. There are strategies — such as renting the property — that can affect how your home is treated.

What is an immediate care plan?

An immediate needs annuity is a lump-sum payment that secures a guaranteed, tax-free income for life to pay for care. The income is paid directly to the care provider and is free of income tax. This provides certainty about care funding regardless of how long you need care.

Need help with care funding?

We understand how stressful this can be. Book a consultation and we'll help you navigate the options with clarity and compassion.

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