Most people think of retirement planning as making sure they have enough to live comfortably when they stop working. A mix of pension income, maybe some savings, a few trips a year, time with family. But there’s one big expense many people forget to plan for: care.

And given how much longer we’re all living, that “later life” phase can stretch on for decades. In fact, some of us could spend nearly as many years in retirement as we did working. So it’s worth thinking about what kind of support you might need in the future, and how you’d want to pay for it.

What care might you need and how much does it cost?

Care in later life can take many forms. For some, it starts small: a bit of help at home a few times a week with cooking, cleaning or getting around. For others, it becomes full-time support, whether that’s live-in care or moving into a residential home.

Here’s what different types of care typically involve, and how much you might expect to pay:

Type of care	What it involves	Average cost*	Typical annual total
Occasional home care	A few visits per week to help with daily tasks (e.g. meals, cleaning, shopping)	£25 per hour	£5,000-£15,000
Full-time home care	Regular daytime or live-in support at home	£1,000-£1,500 per week	£50,000-£75,000
Residential care home	Accomodation, meals and personal care	£950 per week	£49,000
Nursing home	Residential care with medical or nursing support	£1,270 per week	£66,000
Specialist dementia care	Residential or nursing care with dedicated dementia support	£1,400-£1,800 per week	£73,000-£94,000

*Based on national averages; costs vary widely by region and level of care needed

Even a few hours of help a week can add up over time, and full-time or specialist care can easily exceed £70,000 a year. Thinking about what kind of support you’d want (and how you’d pay for it) is a key part of preparing for later life.

Why it matters for your retirement plan

Care costs can eat through savings faster than most people expect. And while it’s tempting to assume the council or NHS will cover them, help is often means-tested, meaning you’ll probably need to pay at least part of the bill yourself.

Factoring care into your retirement plan early can protect the lifestyle you’ve worked for and stop your children from facing tough financial decisions later. 

Start by thinking about the kind of care you’d want if you needed it. Would you prefer to stay at home, or move into a residential setting? The average person in care spends around three years there, which could mean £150,000 or more once you include inflation and any specialist support.

Then look at how you might fund it: through savings, pension income or by releasing money from your home. It’s not the most comfortable conversation, but planning now gives you choice, control and peace of mind later.

How to plan for care

Planning for care means understanding two things: what support you might be eligible for, and what you may need to fund yourself. The earlier you explore your options, the more control you’ll have over your choices later. 

Understanding who pays for what

The cost of care depends on your personal circumstances: mainly the type of care you need and the value of your savings and assets. In most cases, your local council will carry out two assessments:

• a care needs assessment, to confirm what kind of help you require
• a financial assessment, to determine whether the council will pay, contribute, or expect you to fund care yourself

If your savings and assets are above a certain threshold, you’ll be classed as a self-funder, meaning you’ll pay the full cost of your care. If they’re below it, the council may cover some or all of the costs.

Current care funding thresholds (2025):

Region	Savings threshold
England	£23,250
Scotland	£32,750
Wales	£50,000
Northern Island	£23,250

In some cases, the NHS Continuing Healthcare scheme can cover the full cost of care if you have significant health or medical needs. It’s not common, but it’s worth checking if you or your partner might qualify.

Should you sell your home? 

For many people, their home isn’t just their biggest asset: it’s a place filled with memories and meaning. That’s why the idea of selling it to pay for care can feel difficult.

The good news is, it’s not always something you have to do. But it does depend on your situation and how early you start planning.

If you move into permanent residential care, the value of your home is usually included in your financial assessment. The main exceptions are when certain people still live there, such as a spouse, partner or dependent.

That’s why property wealth often plays a role in paying for care. Some people choose to sell their home to cover costs directly. Others rent it out to generate an income stream, or use equity release to unlock part of the home’s value while continuing to live in it.

Each route has different pros and cons, from tax implications to how it affects inheritance plans. A financial coach can help you understand what these options mean for you and whether using your home to fund care fits your overall plan.

Getting advice

Paying for care is one of the most complex areas of financial planning. The rules vary across the UK, and the choices you make can affect your pension income, inheritance plans and eligibility for support. Speaking to someone who specialises in later-life planning can help you:

• understand what you might be expected to pay
• explore the pros and cons of selling or renting out your home
• look at options such as equity release or care annuities
• build care costs into your wider retirement strategy

Knowing how the system works can make a big difference. Planning ahead gives you time to structure your finances in a way that helps your money last longer and ensures you don’t miss out on help you’re entitled to.

If you’re not sure where to start, speaking to an adviser can help you understand your options and put a clear, confident plan in place.