Dominic Browning, Managing Director
Posted by Dominic Browning
26/07/23
News, Resources, Insight and Opinion from Browning Financial Planning

Changes to Care Fees Planning

Dominic Browning, Managing Director
Posted by Dominic Browning
26/07/23

Changes were announced a few years ago which would mean you can keep more of your hard-earned money, if you need to go into care.

These changes were however put back until October 2025 and your guess is as good as mine whether they kick it in to the long grass again.

Anyhow, I thought I would you remind you of the changes anyway.

Currently anyone with assets worth more than £23,250 is deemed to be too rich, will be classed as a self-funder and will receive no help whatsoever. In October 2025, this threshold will be increased to £100,000, which is good news.

A new cap on care costs will be introduced in October 2025. You will never have to pay more than £86,000 towards care in your lifetime, however this does NOT include food, energy bills and accommodation and this could add substantially to your total bill.

If you give away your assets prior to needing care, you will fall foul of the deliberate deprivation of assets rule and any gift given will be considered to still be yours. Ways to legitimately protect your home might be writing a Will which sets up a trust on 1st death, allowing you to protect half of the house if the survivor goes into care. Taking equity from your home will reduce the amount of equity in your home and therefore reduce the amount of equity at risk.

Property dis-regards are important too. If you go into care, your home is excluded from the means-test for 12 weeks. Thereafter it is included, but not if your spouse, partner or former partner lives there. It is also disregarded if a family member over 60 or under 18 lives there, or if someone is disabled.

Putting money into exempt investments such as investment bonds is more problematic too. Even if you have done this years ago and you haven not deliberately deprived yourself of capital, the problem is that whilst the Local Authority cannot access your capital in the investment bond, neither can you. So, if you want to upgrade to a nicer care home, you cannot use this money.

Putting your home into a trust in your lifetime is more problematic now as Local Authorities will grill you as to why you did this. We think using Will trusts, equity release and property dis-regards are better solutions. In October 2025, if the government does not change its mind again, the increased limits will help to improve the lot of those who sadly get adversely affected by care fees.

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