Medical & General Financial Solutions Ltd

Planning for care: The costs you might need to make part of your financial plan

Published: July 22, 2025 by Jennifer Armstrong

Facing challenges later in life that might mean you need to rely on care can be difficult to think about. Yet, planning for care may be an important part of your overall financial plan and provide security should you need support in the future.

Read on to find out how care services could affect your finances.

Improving life expectancy is likely to mean more people need care

Life expectancy in the UK has increased over the last few decades.

Indeed, in June 2025, data from the Office for National Statistics (ONS) show a 65-year-old man has an average life expectancy of 85, and a 1 in 10 chance of reaching 96. For a 65-year-old woman, the average life expectancy is 88, with a 1 in 10 chance of reaching 98.

Living for longer doesn’t automatically mean you’ll need to rely on care services. However, as health needs often become more complex later in life, it’s important to think about them.

According to ONS data, there were more than 372,000 care home residents in the UK at the end of February 2023. This was an increase of 3.1% when compared to a year earlier.

Notably, 37% of residents were funding their care themselves. So, making potential care costs part of your financial plan could be essential for your long-term financial security.

Other forms of care, such as carers coming to your home, may also need to be self-funded.

You’ll usually need to self-fund care if you have more than £23,250 in savings

Whether you need to pay for care yourself depends on your financial circumstances and where you reside in the UK.

In England and Northern Ireland, you usually won’t be entitled to help from your local council if you have savings of more than £23,250, which is known as the “upper capital limit”. If you’ll be moving into a care home, you typically won’t be eligible for local council support if you own property.

As a result, many people find they’re responsible for funding their care costs, and it could place pressure on your finances if it’s not something you’ve considered.

Please note, the threshold for paying for care is different in Scotland and Wales.

So, how much should you expect to pay if you need care later in life?

The cost of care can vary significantly depending on the level of support you need and where you live. According to the NHS, on average, you can expect to pay:

• £20 an hour for a carer to come to your home
• £700 a week for a residential care home, rising to more than £850 a week if you require a nursing home
• £800 a week for a carer who lives at your home, though this could rise to as much as £1,600 if your needs are complex.

Even if you expect to rely on family, there might be some costs to consider. For example, if your child is regularly visiting your home to lend support, you may choose to cover travel expenses. Or your child might need to reduce their working hours, so you may help them financially.

Overlooking potential care costs could affect your long-term finances

Even over a single year, the cost of care can add up to a significant expense. If it’s not something you’ve thought about, you could be overlooking an outgoing that may have a huge effect on your long-term finances and the wealth you expect to leave for loved ones when you pass away.

As a result, making it part of your financial plan from the outset could offer you peace of mind and avoid potential delays should you need support. You might:

• Speak to your loved ones about your wishes and name a Lasting Power of Attorney
• Calculate how much care could cost in your area, depending on your wishes
• Assess how care may reduce the value of your estate over the long term
• Set aside a portion of your wealth now to cover potential care costs.

You might not need any support later in life, but being proactive could make potentially difficult decisions around care easier.

Contact us to talk about your care plan

If you have any questions about your current care plan or would like to discuss how we could help you create one, please contact us.

Next month, read about how you might create a care fund that could give you confidence and financial security if you need support later in life.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning or Lasting Powers of Attorney.

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