August 2022

Have you prepared for the potential cost of long-term care?


The issue of paying for long-term care in the future has been a prevalent topic over the past 12 months.

Since September 2021, when the government outlined details of the new way social care would be funded in the UK, you may have reconsidered your ability to afford care if you should ever need it.

Yet despite the changes and the amount of column inches these changes have generated, new research from insurer Canada Life reveals some worrying facts about many people’s attitude towards the prospect of requiring long-term care.

Polling 2,000 UK adults in May 2022, the study found that:

  • 30% of over-60s don’t expect to pay for care costs
  • 41% never expect to pay the care costs of a loved one
  • 13% expect the government to pay for their care.

These figures are far from representative of what the reality of relying on social care might look like. And, not knowing the facts could put you or your family in a difficult position if you do ever require long-term care.

So, read on to find out why you need to plan for the potential cost of long-term care, and what this might be for you.

Average costs start from £28,652 a year

Firstly, let’s look at how much care costs on average.

According to, a care home search and review website, the average monthly cost of residential care in the UK is £2,816. Meanwhile, the average monthly cost of receiving nursing care in a care home is £3,552.

According to consumer group Which?, these figures will also partially depend on where you live.

For example, the average cost of a residential care home in 2019/20 ranged from £551 a week in Northern Ireland to £858 in Scotland. That represents a difference of £307 a week, or almost £16,000 a year.

In addition, costs vary within England. Residential care in a nursing home in the south-east of England costs 44% more than a nursing home in the north-east.

Even if you decide to continue living in your own home and arrange regular visits from a carer, this would cost you upwards of £11,000 a year. This assumes you had 15 hours of care a week at £15 an hour, which Age UK says is the national average.

Millions of people will require care – so don’t assume “it won’t be me”

If you think “I am fit and healthy, I won’t need care” then you could be putting your future financial security in jeopardy.

While Canada Life found that 2 in 5 people don’t expect to pay for the care costs of loved ones, the truth is that the majority of over-65s are likely to need care at some time.

According to an official government report, “around 3 out of 4 adults over the age of 65 will face care costs in their lifetime.”

With millions of people expected to need care in the future, including potential costs in your financial plan now can ensure you have enough funds to meet these bills should they arise.

Government help for long-term care costs is means-tested

In September 2021, the government announced reforms to the way individuals would pay for social care.

Beginning in October 2023, the amount individuals will have to pay towards their care will be fixed at £86,000. This is a cap on the amount anyone in England will need to spend on their personal care over their lifetime.

While this could provide a useful cap on care costs, it’s important to remember that the cap only includes care costs such as washing or eating and excludes any “hotel costs” such as utilities and rent.

According to Metro, those costs could come to an additional £20,000 a year.

So, when you consider the additional costs not covered by the cap, the average 12-month stay in a nursing care home could cost you nearly £70,000.

And, while the government has also increased the point at which a person is eligible for local authority support, many millions of people will still have assets that exceed the new £100,000 limit.

That’s because the value of your house will be included in the calculation unless:

  • Your spouse or partner is still living in it
  • You need a paid carer to come into your home.

Considering that the cost of care could easily run into tens of thousands of pounds, and that the value of your assets might mean you have to self-fund your care, it’s vital you make plans for this eventuality.

Make financial preparations in case you ever need care

Clearly, while not everyone will require care, it’s likely that you will need to pay for assistance at some point.

Canada Life’s research shows that the top three ways over-60s intend to cover care costs are their State Pension, savings, or private pensions.

While your State Pension is guaranteed if you’ve made sufficient contributions throughout your life, savings and private pensions are finite.

As a result, you’ll need to make sure that these are viable options for funding your care without impeding your ability to live the lifestyle you want in retirement.

Speak to us

If you’d like help planning your finances so that there are funds available to pay for your or a family member’s care, please get in touch with us at Holborn Financial.

Email or call 020 8946 8186 to speak to an experienced adviser today.