What is the long-term cost of care and how do I plan for it?

Long-term care refers to the support someone may need — at home or in a residential or nursing home — if they can no longer fully look after themselves due to age, illness, or disability. In the UK, whether the local council contributes to care costs depends on a means test that looks at both income and capital (savings, investments, and in some cases property). If your assets exceed the upper threshold, you are expected to fund care yourself until they fall below it. Because care needs can last for months or years, the total cost can be substantial and is difficult to predict in advance.

Planning ahead usually involves thinking about several things: what assets you hold and how they might be assessed; whether existing pension income or savings could cover fees; whether a specialist care-fees annuity (a product that pays a guaranteed income to the care provider) might be appropriate; and how any estate planning, including wills and Lasting Powers of Attorney, fits into the picture. A Lasting Power of Attorney — a legal document that lets someone you trust manage your finances or health decisions if you lose capacity — is often discussed alongside care planning because it becomes essential if you are unable to make decisions yourself.

Care funding rules are set by local authorities and the NHS, and the thresholds and contribution rules can change, so it is worth checking current figures with MoneyHelper or your local council.

A regulated financial adviser who specialises in later-life planning can assess your individual circumstances and explain the options that may be available to you.