Later Life and Care Fees Planning

Later Life & Care Fees Planning FAQs

• Can someone acting under a Lasting Power of Attorney make gifts on my behalf?

  Yes, but only within strict limits.

  A person acting under a Lasting Power of Attorney (LPA) for property and financial affairs can usually make certain gifts on behalf of the donor, but their powers are much more restricted than many people realise. In most cases, gifts must be reasonable in value, made on customary occasions such as birthdays, weddings or religious celebrations, or to charities the donor supported during their lifetime.

  Larger gifts, inheritance tax planning gifts, transfers of property or substantial wealth transfers will often require approval from the Court of Protection before they can be made lawfully.

  Why this matters

  Many families assume that once an attorney is appointed, they can continue the donor’s previous gifting strategy or implement inheritance tax planning on the donor’s behalf.

  In reality, attorneys must act in the donor’s best interests and have limited authority to reduce the donor’s estate through gifts. Making unauthorised gifts can create legal problems, disputes between family members and potential personal liability for the attorney.

  This issue often arises where a parent has lost capacity but previously discussed gifting wealth to children or grandchildren.

  What the answer depends on

  The position will depend on:

  • Whether the donor still has mental capacity to make the decision themselves.
  • Whether the LPA is for property and financial affairs.
  • The size of the proposed gift.
  • The purpose of the gift.
  • The donor’s past gifting patterns.
  • The donor’s current and future financial needs.
  • Whether the gift could affect care funding or financial security.
  • Whether Court of Protection approval is required.

  Common examples that may be permissible without court approval include:

  • Modest birthday or Christmas gifts.
  • Small wedding or civil partnership gifts.
  • Donations to charities the donor regularly supported.
  • Examples that may require court approval include:
  • Large cash gifts to children.
  • Inheritance tax mitigation strategies.
  • Gifts into trust.
  • Property transfers.
  • Significant gifts made under a surplus-income strategy.

  A common mistake is assuming that because the donor made such gifts when they had capacity, the attorney can automatically continue doing so after capacity is lost.

  How Wingate would look at this

  At Wingate, we would normally treat attorney gifting as both a legal and financial planning issue.

  Where inheritance tax planning is involved, the question is rarely just whether a gift could reduce tax. A planner would normally consider the donor’s future income requirements, care costs,

  longevity, existing gifting history and whether the proposed transaction is likely to be permitted under the relevant legal framework.

  The risk of creating legal difficulties often outweighs any potential tax saving if the gifting powers are not properly understood.

  What to do before acting

  Before an attorney makes a significant gift:

  • Confirm whether the donor still has capacity to make the decision themselves.
  • Review the terms of the Lasting Power of Attorney.
  • Consider the donor’s future income and care needs.
  • Document why the gift is in the donor’s best interests.
  • Check whether Court of Protection approval is needed before proceeding.
  • Keep detailed records of any gifts made.

  Where substantial wealth, inheritance tax planning or family succession planning is involved, the legal authority to make the gift should be established before any transfer takes place.

• How much should I budget for long-term care costs?

  Long-term care can be expensive, but there is no single figure that applies to everyone. Costs vary depending on where care is provided, the level of support required, geographical location and whether nursing care is needed.

  Broadly, care provided at home may cost hundreds of pounds per week, while residential care and nursing care can cost significantly more, often amounting to many tens of thousands of pounds per year. For people requiring care over a number of years, the cumulative cost can have a major impact on retirement savings and inheritance plans.

  Because fees vary widely and change over time, it is often more useful to assess affordability under a range of scenarios than to focus on a single headline figure.

  Why this matters

  Care costs are one of the biggest unknowns in later-life financial planning.

  Some people never require formal care, while others may need support for many years. Planning only for average outcomes can be risky. Equally, holding excessive assets solely because of concerns about future care costs may prevent people from enjoying retirement or helping family members when they would like to.

  Understanding the potential scale of care costs can help inform decisions about retirement spending, gifting, inheritance tax planning and investment strategy.

  What the answer depends on

  The likely cost will depend on factors including:

  • Whether care is provided at home or in a residential setting.
  • The number of care hours required each week.
  • Whether specialist nursing care is needed.
  • Regional variations in care-fee levels.
  • Inflation and future increases in care costs.
  • Whether any NHS or local authority funding is available.
  • The duration of care required.

  Common misconceptions include:

  • Assuming everyone will eventually need residential care.
  • Assuming care costs are covered by the NHS.
  • Assuming a property must automatically be sold to pay care fees.
  • Assuming current care costs will remain unchanged for future decades.

  The duration of care often has as much impact as the weekly fee. A modest weekly cost over many years can exceed the cost of a short period of intensive care.

  How Wingate would look at this

  At Wingate, we would usually avoid planning around a single care-fee estimate.

  Instead, a planner would normally test your retirement plan against a range of scenarios, such as no care costs, moderate care costs and significant long-term care requirements. This can help identify whether your income, investments and capital reserves remain sustainable under different outcomes.

  The objective is often to maintain flexibility. Decisions about gifting assets, reducing inheritance tax or increasing retirement spending should usually be considered alongside the possibility that care costs may arise later.

  What to do before acting

  Before making significant retirement, gifting or estate-planning decisions:

  • Review your current assets, pensions and sources of income.
  • Estimate how much capital could be available for future care if required.
  • Understand the difference between self-funded care, local authority support and NHS Continuing Healthcare.
  • Consider how long your financial resources might last under different care-cost scenarios.
  • Review any plans to gift money to family members in light of potential future care needs.

  A long-term cashflow assessment is often more useful than relying on average care-fee figures alone.

• What is a deferred payment agreement and when might it be used to pay for care?

  A deferred payment agreement (DPA) is an arrangement that may allow someone to delay selling their home to pay for residential care fees.

  Under the scheme, the local authority pays some or all of the eligible care costs on the person’s behalf and recovers the money later, usually when the property is sold or from the estate after death.

  The agreement is effectively secured against the property and interest and administration charges may apply.

  A deferred payment agreement does not remove the cost of care. It changes when and how the cost is paid.

  Why this matters

  Many families worry that a house will need to be sold immediately when someone moves into residential care.

  In some circumstances, a deferred payment agreement can provide time and flexibility. It may allow the property to be retained temporarily, giving families more time to consider whether to sell, rent out the property, or make other financial arrangements.

  However, the accumulating debt reduces the value ultimately available to beneficiaries, so it should be considered as part of a wider financial plan.

  What the answer depends on

  Eligibility will depend on factors including:

  • Whether the person is entering permanent residential care.
  • The value of the property.
  • The amount of equity available.
  • Whether other assets are sufficient to fund care.
  • Whether the property is included in the local authority’s financial assessment.
  • The local authority’s assessment of eligibility and scheme requirements.

  Common misunderstandings include:

  • Assuming a deferred payment agreement means care is free.
  • Assuming everyone automatically qualifies.
  • Forgetting that interest and charges may increase the amount repayable.
  • Believing the property can never be sold if a DPA is in place.
  • Failing to consider the impact on beneficiaries and estate planning.

  In some cases, renting out the property while a deferred payment agreement is in place may help offset some of the ongoing care costs, although this creates additional practical and tax considerations.

  How Wingate would look at this

  At Wingate, we would usually assess a deferred payment agreement alongside the wider retirement and estate plan.

  The question is often not simply whether a property can be retained, but whether retaining it is financially sensible.

  Do you satisfy the criteria for applying for a DPA?

  What to do before acting

  Before entering into a deferred payment agreement:

  • Obtain a clear estimate of anticipated care costs.
  • Understand the interest rate and administration charges.
  • Review the property’s value and any outstanding borrowing.
  • Consider whether the property could generate rental income.
  • Assess the likely impact on your estate and inheritance plans.
  • Check whether NHS Continuing Healthcare or other funding support may be available.

  A deferred payment agreement can provide valuable flexibility, but it should normally be assessed alongside all available funding options rather than viewed as the default solution.

• Should I consider an immediate needs annuity to help pay for care fees?

  An immediate needs annuity, sometimes called a care fees annuity, is a specialist insurance product designed for people who already need long-term care. It provides a guaranteed income for life that can be used towards care costs, typically in a care home or nursing home setting.

  In exchange for a one-off lump-sum payment, the insurer agrees to pay a regular income for as long as the person needing care remains alive. The income can often be paid directly to a registered care provider and, if structured correctly, may receive favourable tax treatment.

  Why this matters

  One of the biggest challenges in later-life planning is uncertainty. Nobody knows how long care will be needed or how much the total cost may be.

  An immediate needs annuity can turn an uncertain future liability into a known cost. Rather than worrying about whether investments or savings will last long enough, some families prefer the security of having a guaranteed income that covers some or all of the care fees.

  However, once purchased, the capital used to buy the annuity is generally irrecoverable, so the decision requires careful analysis.

  What the answer depends on

  Whether an immediate needs annuity is suitable will depend on:

  • The person’s age and health.
  • Current and expected care costs.
  • The amount of available savings and investments.
  • Other sources of income such as pensions.
  • Whether care costs are expected to rise.
  • The desire to preserve assets for spouses or beneficiaries.
  • The financial strength and terms offered by the insurer.

  Potential advantages include:

  • Guaranteed income for life.
  • Protection against unexpectedly long care periods.
  • Greater certainty for family budgeting.
  • Reduced investment and longevity risk.
  • Potential disadvantages include:
  • Significant upfront cost.
  • Limited flexibility once established.
  • Capital is typically committed permanently.

  If the person dies earlier than expected, the value received may be less than the amount paid unless specific protection features were selected.

  How Wingate would look at this

  At Wingate, we would usually avoid looking at an immediate needs annuity in isolation.

  A planner would normally compare the annuity against other funding options, including using existing income, drawing from investment portfolios, retaining cash reserves, or combining several strategies. Care-fee planning often interacts with inheritance tax planning, gifting decisions, investment risk and the financial security of a surviving spouse.

  The question is not simply whether the annuity is good value. It is whether it improves the overall financial plan and provides greater certainty at a stage of life when security may be more important than investment growth.

  What to do before acting

  Before considering an immediate needs annuity:

  • Obtain a clear estimate of current and expected care costs.
  • Review all sources of income and capital.
  • Check whether NHS Continuing Healthcare funding may be available.
  • Understand how long existing assets could fund care without an annuity.
  • Compare multiple quotations from specialist providers.
  • Review the impact on your estate and inheritance plans.

  The most important step is normally assessing the affordability and sustainability of all available care-funding options before committing a large amount of capital.

• What is later-life planning and when should I start?

  Later-life planning is the process of organising your finances, legal affairs and family arrangements for the later stages of retirement and beyond. It typically involves reviewing retirement income, investments, inheritance tax, gifting, wills, powers of attorney, potential care costs and how wealth will be passed to future generations.

  The aim is not simply to preserve wealth. It is to help ensure you can maintain your desired lifestyle, remain financially secure if circumstances change, and make informed decisions about your family and estate.

  Why this matters

  Many of the biggest financial decisions people make occur after retirement rather than before it.

  Questions such as whether you can afford to help children, how care costs might affect your finances, whether inheritance tax could become an issue, and how assets should pass to future generations are all part of later-life planning.

  Without a coordinated plan, people can make decisions in isolation that create unintended tax consequences, reduce financial flexibility or leave family members facing avoidable complications.

  What the answer depends on

  The areas typically considered include:

  • Retirement income and spending needs.
  • Investment strategy and withdrawal planning.
  • Inheritance tax exposure.
  • Lifetime gifting and support for family members.
  • Care costs and later-life healthcare needs.
  • Wills and estate administration.
  • Lasting Powers of Attorney.
  • Pension death benefits and beneficiary nominations.
  • Trusts and wider estate planning arrangements.
  • Family circumstances, including remarriage, blended families and vulnerable beneficiaries.

  Common mistakes include:

  Focusing solely on inheritance tax.
  Giving away assets without considering future care or income needs.
  Failing to review wills and beneficiary nominations.
  Assuming a spouse or family member can automatically make financial decisions if capacity is lost.
  Leaving planning until health issues arise.

  How Wingate would look at this

  At Wingate, we would usually view later-life planning as a series of connected decisions rather than separate tax, investment and estate-planning exercises.

  For example, a gifting strategy might affect retirement cashflow, future care affordability and inheritance tax planning at the same time. Likewise, investment decisions may influence how much income can be sustained throughout retirement and what assets are ultimately left to family members.

  A planner would normally test these decisions together using long-term cashflow modelling rather than assessing each issue in isolation.

  What to do before acting

  Before starting a later-life planning review:

  • List your assets, liabilities, pensions and investments.
  • Review expected retirement spending.
  • Check that your will reflects your current wishes.
  • Confirm beneficiary nominations remain appropriate.
  • Review any powers of attorney already in place.
  • Consider potential future care costs.
  • Identify any planned gifts or support for family members.
  • Assess whether inheritance tax may become an issue over time.

  The earlier these issues are considered, the more options are usually available.

• What is NHS Continuing Healthcare and could I qualify?

  NHS Continuing Healthcare (often called CHC) is a package of care that is fully funded by the NHS for people whose primary need is a health need rather than a social care need.

  If you qualify, the NHS may pay the full cost of your assessed care needs, whether that care is provided at home, in a care home or in another setting. Unlike local authority social care funding,

  NHS Continuing Healthcare is not means tested. Your savings, investments and property are not taken into account when determining eligibility.

  Why this matters

  Many people assume they must pay for all long-term care themselves if they have assets or a property. However, some people with significant health needs may qualify for NHS Continuing

  Healthcare, meaning care costs could be funded regardless of their financial position.

  This can have a major impact on retirement planning, estate planning and decisions about gifting assets to family members.

  What the answer depends on

  Eligibility is based on the nature, complexity, intensity and unpredictability of your care needs rather than your finances.

  Factors often considered include:

  The extent of nursing and healthcare requirements.
  The complexity of medical conditions.
  How frequently care interventions are needed.
  Whether needs are difficult to manage or unpredictable.
  The overall balance between healthcare and social care needs.

  The assessment process usually involves:

  • An initial screening assessment.
  • A full assessment where appropriate.
  • Input from healthcare professionals and care providers.
  • A decision on whether you have a “primary health need”.
  • Common misunderstandings include:
  • Assuming a diagnosis alone guarantees eligibility.
  • Assuming everyone in a nursing home qualifies.
  • Assuming high care costs automatically mean NHS funding.
  • Waiting too long to request an assessment where needs may justify one.

  People who do not qualify for NHS Continuing Healthcare may still be entitled to other forms of NHS support or local authority assistance, depending on their circumstances.

  How Wingate would look at this

  At Wingate, we would normally consider NHS Continuing Healthcare as one part of wider later-life planning.

  When projecting future care costs, a planner would usually avoid assuming either that all care will be self-funded or that NHS funding will automatically be available. Financial plans are often stress-tested against a range of possible outcomes so that care funding uncertainty does not undermine retirement security or gifting plans.

  This is particularly important where inheritance tax planning, family gifting or major estate-planning decisions are being considered.

  What to do before acting

  If you or a family member may require long-term care:

  • Understand the difference between social care and healthcare funding.
  • Check whether an NHS Continuing Healthcare assessment has been requested.
  • Review medical evidence and care records.
  • Consider how care costs would affect your wider financial plan if NHS funding were not available.
  • Review gifting and estate-planning decisions in light of potential future care costs.

  It is often easier to plan effectively when NHS funding possibilities are considered before major financial decisions are made.

• When will my local authority contribute towards the cost of care?

  A local authority may contribute towards the cost of care if you are assessed as having eligible care needs and your financial circumstances fall within the relevant means-testing rules.

  The process normally involves two separate assessments. First, the local authority assesses whether you have eligible care and support needs. If you do, it will then carry out a financial assessment to determine how much you are expected to contribute towards the cost of that care.

  Depending on your income, savings, investments and property ownership, the local authority may pay some, most or none of the cost. The rules are complex and can vary according to circumstances.

  Why this matters

  Many people assume the council will automatically pay for care if they need it. Others assume they will have to pay everything themselves.

  In reality, the outcome depends on both your care needs and your financial position. Understanding the rules can help when making decisions about retirement spending, inheritance planning, gifting assets and preserving financial security.

  What the answer depends on

  Key factors include:

  • Whether your care needs meet the local authority’s eligibility criteria.
  • Whether care is provided at home or in a residential setting.
  • Your income, savings and investments.
  • Whether the value of your home is included in the assessment.
  • Whether a spouse, civil partner or qualifying dependant continues living in the property.
  • Whether you qualify for NHS Continuing Healthcare, which is assessed under different rules.
  • The means-testing limits and social care regulations in force at the time care is needed.

  Common misunderstandings include:

  • Assuming the family home is always taken into account.
  • Assuming NHS care and social care are funded in the same way.
  • Giving away assets in the belief that this will automatically protect them from care-fee assessments.
  • Assuming there is a guaranteed maximum amount anyone will have to pay.

  Local authorities can investigate deliberate deprivation of assets where assets have been transferred primarily to avoid care charges.

  How Wingate would look at this

  At Wingate, we would usually consider care funding alongside retirement income planning, inheritance tax planning and lifetime gifting.

  For example, a large gift to children may reduce assets available for future care needs. Equally, retaining more capital than necessary solely out of concern about future care costs may not always be the most effective strategy.

  A planner would normally test different scenarios, including longer life expectancy, higher care costs and changing health needs, before making significant gifting or estate-planning decisions.

  What to do before acting

  Before making major financial decisions:

  • Estimate your assets, income and retirement spending needs.
  • Review whether any planned gifts could affect future affordability.
  • Understand the difference between local-authority-funded care and NHS-funded care.
  • Check how your property would be treated in a care-fee assessment.
  • Review wills, powers of attorney and later-life planning arrangements.

  Care funding should usually be considered as part of a wider financial plan rather than as a standalone issue.

• Will I have to pay for my own long-term care?

  Possibly. In England, whether you have to pay for your own long-term care depends on your financial circumstances, the type of care you need, and where that care is provided.

  Many people are surprised to learn that social care is generally means tested, unlike NHS healthcare. If you have sufficient assets or income, you may be expected to contribute towards some or all of your care costs. However, some forms of care, particularly where needs are primarily health-related, may be funded by the NHS.

  The rules are complex and can have a significant impact on retirement planning, inheritance planning and decisions about gifting assets.

  Why this matters

  Care costs can be substantial, particularly if care is needed for several years.

  People often focus on inheritance tax planning or gifting money to children without considering how future care costs might affect their financial security. Giving away assets too early, or for the wrong reasons, can create difficulties if care is later required.

  Understanding the potential cost of care can help you make more informed decisions about retirement spending, gifting and estate planning.

  What the answer depends on

  Whether you may have to pay for care depends on factors including:

  • The type of care required.
  • Whether care is provided at home, in a residential care home or a nursing home.
  • Your income, savings and investments.
  • The value of your home and whether it is included in any financial assessment.
  • Whether a spouse, civil partner or certain other people continue living in the property.
  • Whether your needs qualify for NHS Continuing Healthcare funding.
  • The rules in force at the time care is needed.

  Common misunderstandings include:

  • Assuming the NHS pays for all long-term care.
  • Assuming a house must always be sold to pay for care.
  • Giving away assets in an attempt to avoid care fees, which can lead to local authorities applying deprivation of assets rules.
  • Focusing solely on inheritance preservation rather than personal financial security.

  How Wingate would look at this

  At Wingate, we would usually view care costs as part of a wider retirement and estate planning exercise.

  A planner would normally assess likely future spending needs, available income sources, investment assets, pensions, property wealth and potential care scenarios. The aim is often to strike a balance between maintaining financial independence, helping family members where appropriate and preserving flexibility if circumstances change.

  For many people, the question is not simply whether care fees can be avoided, but whether their financial plan remains resilient if care is eventually required.

  What to do before acting

  Before making significant gifts or implementing inheritance tax strategies:

  • Estimate your current assets and income.
  • Review your expected retirement spending.
  • Consider how care costs might affect long-term affordability.
  • Check whether your plans rely on gifts or asset transfers that could later be challenged under deprivation of assets rules.
  • Understand the difference between social care funding and NHS-funded care.

  A care-fee discussion is often most useful before major gifting or estate-planning decisions are made, rather than after assets have already been transferred.