Planning ahead can safeguard both your home and your financial security in later life
The idea of selling a home to cover long-term care costs is a concern for many households. With increasing life expectancy and the high expenses of residential and nursing care, the family home often becomes central to funding plans.
Although care must be taken in some way, there are strategies to control costs and plan ahead so that selling the property isn’t the only solution.
How care costs are assessed
In England, the local authority conducts a financial assessment to determine the amount an individual must contribute towards their care. If savings and assets, including the value of a home, exceed certain thresholds, individuals are expected to pay for their own care. Only when assets fall below the threshold does state support kick in.
There are exceptions. For instance, if a spouse or certain relatives continue to reside in the property, the home may be excluded from the assessment. These rules can offer protection, but they depend on circumstances and require careful understanding.
Using savings and income
For those with sufficient pensions, savings, or investments, it may be possible to fund care without depleting property wealth. Relying on income streams or gradually utilising savings can create a buffer, keeping the home outside the immediate considerations.
However, care costs are substantial. The average weekly fee for residential care for self-funders is approximately £1,298[1], with some providers charging between £925 and £2,828 per week, depending on the level of care required[2].
For many households, this means that income and savings alone may not suffice in the long run. Planning how these resources relate to property wealth is, therefore, a crucial aspect of financial preparation.
Equity release and other options
An alternative to selling is equity release, which allows homeowners to access some of the value tied up in their property while continuing to reside there. The funds released can be utilised for care costs, whether at home or in a residential setting.
Another option is renting out the property if the individual enters care. This can create an income stream that helps cover fees while still allowing ownership to be retained. Both options involve financial and practical considerations, and the effect on inheritance should be carefully considered.
Protection through planning
Wills, trusts, and broader estate planning also play an important role. Placing assets into specific legal structures may, in some cases, influence how they are assessed. However, deliberate deprivation of assets, where wealth is transferred to avoid care costs, can be challenged by local authorities. Planning must therefore be genuine, timely, and properly structured.
Seeking regulated professional advice before making major decisions is vital, not only to comply with the rules but also to ensure that care needs are met without creating unnecessary financial strain.
Balancing care and property
Avoiding the sale of a home to fund care is not always possible, but it is not inevitable either. With early planning, the right combination of income, savings, and property-based solutions can offer alternatives. For many, the goal is to strike a balance between the dignity of receiving necessary care and the desire to preserve a family home for future generations.
Source data:
[1] carehome.co.uk/advice/care-home-fees-and-costs-how-much-do-you-pay
[2] bupa.co.uk/care-services/care-home-co
