02
Jul
Avoid care fee surprises: Plan now for peace of mind
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Worried about care costs? You're not alone – and there are solutions
You’ve worked hard for your home, your savings and your independence - so the thought of it all being eaten up by care fees can feel deeply unsettling. It’s natural to feel overwhelmed, but with the right advice and some forward planning, you can protect your assets, ease the burden on loved ones and stay in control of the decisions that matter.
Who pays for your care?
If you have savings of more than £23,250 and/or own a property, you will be responsible for covering all care costs until your capital falls below this threshold (unless you qualify for full NHS Continuing Care or are provided for under Section 117 of the Mental Health Act 1983).
If your savings and/or capital are £23,250 or less, you can apply for a financial assessment by your local council to determine your contribution.
The council will evaluate your earnings, pensions, benefits, savings and property. Any capital above £14,250 will be considered in the assessment. You will always be left with a Personal Expenses Allowance, which is currently no less than £30.65 per week and is reviewed annually.
What if you own a property?
If you own a home and move into a residential care home, you may need to sell or rent out the property to cover care fees. However, there are exceptions:
- If your spouse or partner continues living in the property, it will be disregarded in the financial assessment.
- The property is also disregarded if another resident is over 60 years old or disabled.
Attempting to transfer or spend assets before entering care to avoid fees can be considered deliberate deprivation, which councils have the right to investigate.
The importance of a lasting power of attorney
Another essential aspect of planning for care fees is ensuring that trusted individuals can manage your finances and healthcare decisions if you become unable to do so. There are two types of lasting power of attorney (LPA):
- Property and financial affairs LPA – Allows your chosen attorney to manage your bank accounts, investments, direct debits and property matters, including selling your home if necessary.
- Health and welfare LPA – Comes into effect only if you lack mental capacity. Your attorney can liaise with healthcare professionals, make decisions about your care home and even consent to or refuse life-sustaining treatment according to your wishes.
Registering an LPA currently takes 8-10 weeks, so it is wise to plan ahead. Without an LPA, managing care home payments can be challenging, potentially leading to late payment fees or interest charges.
If you lose mental capacity before setting up an LPA, a family member, friend or professional attorney must apply for a Court of Protection order to manage your affairs. This is a more complicated and costly process than creating an LPA in advance.
Kathryn Livesey, Private Client Lawyer, LCF Law
Taking proactive steps to plan for care fees ensures your financial and personal affairs are handled smoothly. By understanding care fee assessments, protecting your assets and setting up an LPA, you can secure your future and peace of mind.
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