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If you or a loved one need long-term care in later life, how will this be paid for? Will you have to sell the family home or can you leave it to loved ones? We look at what help is available and look at options of how to avoid selling your house to pay for care.
In the UK, the government can potentially require you to use your home’s value to fund care costs. However, this typically happens when you move into a care home permanently and you don’t have a spouse or dependant still living in your home.
You can avoid having to sell your house to pay for care if you or your spouse / partner (or qualifying dependants) want to continue living in your home. A qualifying dependant could be any of the following who also lives in your home:
In short, you don’t have to worry about your nearest and dearest becoming homeless just because you need care.
A financial assessment, or means test, of your assets will work out how much, if anything, the council will pay towards the cost of your care.
If you (or a qualifying dependant) will no longer be living in your home, the value of your home will be included in the means test. But if your home will still be occupied by one of the above, then only your other assets count.
There are the thresholds for receiving financial help with care costs in the UK:
| Region | Threshold |
| England | £14,250 – £23,250 |
| Wales | £24,000 (for care at home) £50,000 (for residential care) |
| Scotland | £21,500 – £35,000 |
| Northern Ireland | £14,250 – £23,250 |
Those with assets above the top threshold generally won’t receive any support. If your assets are below the lower threshold, you’ll be entitled to the maximum care fees support available from your local authority. If you’re within the upper and lower limits, the help you’ll receive will depend on your circumstances.
However, if the value of your home is taken into consideration, you will almost certainly exceed the threshold and get no help from the local authority.
Here are some examples of when someone would or would not need to sell their house to pay for care in England.
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New rules for care home payments were announced in 2021, including the introduction of a care homes fees cap of £86,000 on the amount anyone in England would need to spend on their personal care over their lifetime. In addition, the upper threshold at which someone would become eligible for financial support from their council would rise from £23,250 to £100,000 in England.
The previous government delayed when these changes would take effect from October 2023 until October 2025. But the new Labour government has announced it is scrapping the reforms.
Many people ponder this question: ‘What if I give everything to my children first? Then the means test will show I don’t own anything!’ However, it is not as simple as that – there are complex rules to be aware of.
Deprivation of assets is when someone reduces their assets (such as property or savings) on purpose so that they won’t be included in a financial assessment for care home fees. One example of this might be if you transfer the deeds of your home to one of your children shortly before you need to go into care.
If the local authority decides you have deliberately reduced your assets to avoid paying care home fees, they will usually calculate the value of your estate prior to its deprivation of assets. And you could be prosecuted by your local authority too.
With inheritance tax, there’s a 7 year rule that no inheritance tax is due on gifts you give if you live for 7 years after giving them – unless the gift is part of a trust. But there is no 7 year rule when it comes to deprivation of assets. So before transferring your property or savings to a loved one, be sure to take independent financial advice.
If your assets are jointly shared with your spouse (e.g. shared bank accounts, other property under a joint mortgage) then this shared wealth will count as part of your means test. However, assets owned solely by your spouse (e.g. bank accounts or investments solely in their name) do not count as part of the means test. But again, don’t be tempted to transfer all your assets solely into your spouse’s name at the last minute, as this may count as deliberate deprivation.
The better news is that your children’s assets are counted as completely separate from yours, so are never included in your means test.
If you can avoid needing residential care, there are a number of benefits of paying for care at home instead.
You are far more likely to qualify for financial help – and sooner – if you receive care in your own home rather than move into a residential care home for a number of reasons:
Whether you choose to receive care in your own home or in a residential home, and whether or not you have financial support from the local authority, having enough money is only part of the issue. The big challenge is to work out how to use that money as effectively as possible, so that you can obtain the exact level of care that you need and receive good value.
There are a number of different ways you may choose to pay for your care, including:
To help you navigate the best way forward, it’s advisable to speak to an independent financial adviser (IFA) who specialises in long-term care funding. Your IFA can talk to you about your needs, give you guidance on how to apply for financial support, and advise you on the best way to use your own assets. If you do sell your home to fund your care fees, this will involve a huge sum of money that needs to be invested somewhere or otherwise used to produce an income, so it’s vital to get this right. You can find this kind of specialist adviser using our tool below.
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You won’t have to sell your parents’ house to pay for care home fees if they only go into a care home for under 12 weeks, or if they have personal savings enough to cover their care home costs.
Having considered the above information, and having discussed with an independent financial adviser, if you’re having to sell your parents’ house to pay for care, there are further potential complications.
First of all, you’ll need lasting power of attorney. This will allow you to act on behalf of your parents, sign the property forms, contract of sale and transfer document. You’ll need to provide a certified copy of the Power of Attorney to your conveyancing solicitor to proceed. If you don’t already have a power of attorney be aware it is a very complicated process and can take 20 weeks for it to be approved. You can apply at GOV.UK
Once you have obtained power of attorney, the council will value the property in their financial assessment. The present market value is less any mortgage or loan (including equity loan) secured on the property and less 10%. The 10% is set aside for the costs of selling the property. A professional valuer, such as a RICS-qualified surveyor, should undertake the valuation.
Next you’ll want to remind yourself of how to sell a house with our step by step guide. You’ll need to find the 11 documents needed for the sale and find an agent to market the property. You can find the best performing local estate agents using our free Best Estate Agent Finder tool. Do then check their contract before signing (you don’t want any unnecessary extra costs to add to your stress!). And compare quotes from quality assured conveyancing solicitors to help you choose the best solicitor at the best price to handle the legal side of selling the house. They should have experience of dealing with cases like this, but remember to ask them, along with these 10 questions to ask before instructing a solicitor. Good luck!
Get instant quotes from regulated and reviewed conveyancing solicitors that cover your area.
You may be able to avoid having to pay for care home fees if you’re eligible for NHS Continuing Healthcare, this is for people whose needs are primarily health-based but you’ll need to meet certain requirements. If you don’t meet the criteria for NHS Continuing Healthcare, but need nursing care, the NHS may pay a contribution towards the cost of your nursing care directly to the nursing home. This is known as
NHS-funded nursing care.
Residential care costs an average of £60,000 a year while nursing home care costs an average of £73,000 a year.
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