Frequently Asked Questions

Very broadly speaking, if you have assets above £23,250* then you will be classed as a self-funder which means that you will have to cover any care costs in full yourself. You can still claim Attendance Allowance and you may also be offered some financial support by your Local Authority if your property is your main asset.

If your assets are under this limit, bearing in mind that a property is not included if a spouse or relative over the age of 60 lives there, you may qualify for Local Authority funding.

To work out who should pay for your care, take a look at our flowchart.

*April 2023/2024 for England and Northern Ireland. In Wales, the limit is £50,000

Having already abandoned the introduction of a £72,000 Cap on care costs due to be implemented in April 2016, a further announcement by the Government stated that from October 2023 there would be a Lifetime Cap on care costs of £86,000. This has now been postponed to October 2025 and many think it may never happen.

Even if it does happen, it is important to note that it won’t be the total cost of your care that will count towards the Cap. It will be a weekly amount set by the Local Authority after assessing your needs (called an ‘Independent Personal Budget’) and this could be considerably lower than you are actually paying, if you are a self-funder.

To make things worse, an assumption will be made that £200 of the Independent Personal Budget will be for ‘hotel’ costs, not care, and so this won’t count towards the Cap either.

It is unlikely that any money spent on care between now and October 2025 will count towards the Cap.

By way of an example, if a self-funder has chosen a Care Home costing £1,400 per week, but the Local Authority set an IPB of £600 per week and deduct the £200 per week ‘hotel’ costs, only £400 of the £1,400 actually being paid by the individual will count towards their Cap.

Using these figures, it will take just over 4 years (from October 2025) to reach the Cap, by which time far more than £86,000 will have been spent.

The only ‘unknown’ at this is the amount the Local Authority would actually set as your IPB. The higher the IPB, the sooner the Cap will be reached.

We say watch this space and look for the devil in the detail!

Self-funders can still cap their own care costs by purchasing an immediate or deferred care fees annuity if affordable and appropriate.

If you have decided that you want to find our more about a care fees annuity then the answer is ‘no’. Eldercare advisers are all SOLLA Accredited, CF8 qualified, independent experts which means that we can answer all your questions and obtain all available care fees annuity quotes for you.

The annuity Providers have to offer the same prices to all financial advisers with the only variable being the adviser’s charge which you agree at outset. We are, in effect, doing the shopping around for you. In addition, we are currently the only Advisory Firm in UK able to obtain quotes from four Insurance Companies.

Yes, that is correct if you are assessed by the NHS as having a “primary health need” which is likely to be a complex medical condition that requires substantial ongoing healthcare. In these cases, regardless of the assets you have, the NHS will either pay for your care in full (this is known as ‘NHS Continuing Healthcare’) or they will at least pay a fixed weekly amount towards it.

The Care Home that you live in must be registered as a ‘Care Home with Nursing’ for you to be eligible for any amount of financial support from the NHS. You can check what type of care a particular Home is registered to provide by looking on their regulator’s website.

You may be eligible for NHS funding even if you are receiving care in your own home, provided you meet the criteria that they set.

Once your capital reaches £23,250* then, provided you meet your Local Authority’s eligibility criteria, they will have an obligation to fund your care. They will, however, have a set amount that they will offer to pay (inclusive of most of your income) and so if the Care Home fees are higher than this, you could be asked to move to a smaller room or you may have to find someone who is prepared to pay a third-party top-up for you or you could even be asked to leave the Home.

It is not the Local Authority that would insist on any of this – it is the Care Home itself and so you should check with them exactly what their stance would be. Their contract should make this clear.

The best thing to do, if this is a concern for you, it to speak to us about whether or not a care fees annuity might be an affordable option for you as this would prevent the situation ever arising.

*April 2023/2024 for England and Northern Ireland

If you have to pay care fees in full yourself, you could run the risk of depleting practically all of your assets in the event of longevity. With interest rates and low-risk investment returns at their current levels, it is rare for ‘shortfalls’ to be met by investment solutions without dipping into the capital itself.

One way to protect capital is to consider the purchase of a care fees annuity to cover any ‘shortfall’ as not only will this make sure reliance upon Local Authority funding is avoided, if it proves to be an affordable option, it will also ‘ring-fence’ any remaining capital as an inheritance for your family.

Of course you are free to do what you like with your assets but if you then ask the Local Authority to fund your care and they believe that you have given away assets for the sole reason of protecting them from care costs, they can simply refuse to pay for you.

This action is referred to as ‘deliberate deprivation’ of assets and there is no time limit beyond which they would ignore such transfers. The 7-year rule only relates to Inheritance Tax planning and of course you would have to have an estate value in excess of the Inheritance Tax ‘nil-rate band’ for any such transfers to be justified as being for this purpose.

It is important to be aware that if your spouse or a relative over 60 lives in the property (as their main residence) then its value is excluded from the Local Authority means-test.

If a move into care means that your house is left vacant you do not necessarily have to sell it. If you can generate sufficient rental income, allowing for possible agent’s fees, maintenance and income tax, to cover the ‘shortfall’ between care costs and other income then there is no need to sell.

If your other assets are less than the £23,250 capital limit you can apply for a loan from your Local Authority. This only usually works as a solution if the loan is for the full cost of care rather than just the ‘standard contribution’ that a Local Authority might pay.

Arranging a Lasting Power of Attorney is the only way to ensure your loved ones, or someone you trust, can handle your affairs if you can no longer do so.

If you become incapable of making decisions for yourself and you do not have a Lasting or Enduring Power of Attorney in place, an application would need to be made to the Court of Protection by your representative to become your Deputy in order for them to be able to act on your behalf.