Are You Thinking About Care This Winter? Here’s What You Need to Know About Care Fees
As the winter months approach, many families start thinking about arranging care for their loved ones. One of the biggest concerns is often the cost of care, and the uncertainty around it can be stressful. Understanding your options and planning can make the process much easier.
We sat down with Nicky Cave from Eldercare Group to get clear guidance for planning care fees for your loved one. Nicky emphasised that early planning, recognising financial strain, exploring funding options, and having legal arrangements in place can save families both time and stress. Her advice forms the basis of this guide, helping you make informed decisions this winter.
Understanding Care Costs
The cost of care varies depending on your loved one’s personal circumstances. Many families worry about how they’ll manage if savings run out while in care. Knowing what support is available and planning can reduce stress for you and your family.
In this blog, we will look over the following aspects of understanding care costs, including Government Support, 12-Week Property Disregard and Deferred Payments, Power of Attorney, and Care Fees Annuities.
Government Support & Means Testing
If you or your loved one’s savings exceed £23,250 (in England), you won’t qualify for financial assistance from your Local Authority until your capital drops below that threshold. Most savings and assets are included, though your home may be excluded in certain situations, such as if:
- Your spouse still lives there
- A relative over 60 or a disabled relative lives there
- A child under 16 lives there
- Care is temporary or within the first 12 weeks of permanent care
What Is Local Authority & What Is The Threshold?
Local Authorities may offer financial assistance for those who meet certain income and asset criteria as long as they also meet their care eligibility criteria (i.e. that they agree the individual needs to move in to a care home). Local Authority support for care fees is means-tested based on your loved one’s assets, and also their income to determine eligibility.
If assets exceed £23,250, they will usually need to fund their care themselves. Conversely, if assets are below £14,250, they generally qualify for the maximum financial support available, with contributions based on income alone. For those whose assets fall between these thresholds, the Local Authority may provide partial assistance, meaning your loved one would still contribute a portion of their funds. Please note that these thresholds are current as of November 2024 and may be subject to change.
The 12-Week Property Disregard & Deferred Payments
When moving your loved one into permanent care, your loved one’s property’s value can be disregarded for the first 12 weeks if their other savings are under £23,250. After this period, if the property hasn’t been sold, Local Authorities may offer a Deferred Payments Agreement. Alzheimer’s Society (2023) describes the Deferred Payments Agreement as a loan repaid when the property is sold. When your loved one sells their home, they must repay the Local Authority the amount they have borrowed plus some interest.
Other Financial Support – Attendance Allowance
Attendance Allowance is a non-means tested, tax-free state benefit which is payable to those over the age of 65 years, who have needed care for longer than six months. It can continue to be paid while in a care home, provided you are paying for the care of your loved one and not funded by the Local Authority. There are two rates you need to know about when it comes to Attendance Allowance, there is the low rate and the higher rate.
- The Lower Rate – For individuals who need help during day or night
- The Higher Rate – For individuals who are needing care both during the day and night.
Protecting Your Finances with a Lasting Power of Attorney (LPA)
AgeUK (2025) describes Lasting Power of Attorney (LPA) as a legal document that appoints someone to make decisions on the behalf of your loved one if they can no longer make or communicate decisions themselves. Having an LPA set up can make things easier when that time comes.
Setting up an LPA ensures your loved one’s trusted person can manage their care and financial decisions if they are no longer able to make or communicate their own decisions. There are two types of LPA, and these include:
- Health & Welfare LPA – Covers health and care decisions
- Property & Financial Affairs LPA – Covers financial matters, including care payments
Without an LPA, a Court of Protection Deputy may need to be appointed, which can be time-consuming and costly.
Care Fees Annuities
The Eldercare Group describes Care Fees Annuities as purchasable insurance plans funded by savings, investments, or property proceeds. They provide a regular, guaranteed, tax-free income to cover care costs for life, leaving remaining capital “ring-fenced” from future care costs. Pricing depends on factors such as age, health, and required income.
Funding Options When Savings Run Low
If your loved one’s funds begin to run low, there are additional options to explore such as Personal Savings and Other Assets, Third-Party Contributions, and Steps for a Local Authority Assessment.
If your loved one’s funds begin to run low, there are additional options to explore:
- Personal Savings and Other Assets
- Reassess all available assets, including property, investments, and pensions
- Consider income from annuities or other passive sources
- Work with a SOLLA-accredited financial advisor, such as the Eldercare Group, to maximise long-term funding
- Third-Party Contributions
- Family or friends can contribute via a Third-Party Top-Up agreement
- Helps cover care costs not met by Local Authority funding
- Steps for a Local Authority Assessment
- Needs Assessment: Evaluates care requirements
- Financial Assessment: Reviews income, assets, and contributions
- Documents Needed: Proof of income, asset details, and care records
Planning Ahead for Peace of Mind
Winter is a good time to start thinking about care and finances. Early planning, reviewing assets, exploring funding options, and seeking advice can help ensure your loved one receives the support they need without unnecessary stress.
Eldercare Group specialises in providing advice about paying for long-term care. To find out more, visit: Eldercare Group
If you’re unsure where to start or would like advice, please contact our homes, and our team can connect you with financial specialists to make the process as straightforward as possible.
