Key Takeaways

  • Care plans provide monthly contributions to the cost of care in return for a one-off premium.
  • You may be entitled to support from your local council for the cost of your care.
  • If you have over £23,250 in savings, you will need to pay for your own care.
  • Talking to a later-life adviser may help provide alternative options to paying for a Care plan. Such as utilising gifts or Trusts.

What is a Care Plan?

A care plan can help financially support the cost of long-term care needed in later life. If an illness, condition, or disability leaves you needing care, and you are over 60, you would be able to consider lifetime care plans which allow you to purchase a plan with a one-off lump sum, in return for support with the costs of care.

How do Care Plan policies work?

In return for a one-off lump sum payment, you will be entitled to monthly payments to cover towards the care costs for the rest of your life. 

The care costs can arise as a result of costs incurred from in-home care, or from care home fees.

Care plan benefits aren't taxed when paid to a registered care provider.

Care plans have no cash in value but will guarantee a monthly benefit for the rest of your life. Payments can start straight away, or they can be deferred.

Do You Need Later-Life Advice?

Are you thinking about writing or altering your Will? Reviewing or setting up your Trusts?
We can help you find a later life specialist to offer you the very best advice for you. Complete our Sunny Fact Find form to provide us a bit more detail about your circumstances and we'll find the best-suited adviser for your needs.
Your appointed adviser will contact you to discuss how they can help, you decide how to proceed.

Why would you need a Care plan?

If you have more than £23,250 in savings, you may have to pay your care fees in full. If your capital is less than £23,250, the local council may help you, but you may still have to pay some of the fees. 

It will be your responsibility to pay for your care if it is deemed affordable for you. However, a care plan can help cover some of the costs of paying for Care

What types of Care Plans are available?

Immediate Lifetime Care Policies

You can consider Immediate lifetime care policies, which allow payments for care to start straight away, and continue for the rest of your life. Immediate lifetime care plans are available with inflation-protected options as well as long, or short-premium protection.

Secured Lifetime Care Policies

Another option is a Secured lifetime care policy, with Secured lifetime care policies you are able to defer payments by up to 5 years.

A Secured Lifetime Care plan is for people who can pay for their own care but want to limit their financial responsibility. They must be at least 60 years old and either already getting care for a physical or mental disability or about to start.

You pay a single premium for this policy and the benefit amount can be inflation protected.

Alternatives to Care Plans

Purchasing a Care plan will not be for everyone. If you are close to the limit of paying your own Care costs it might be that you decide to consider some alternative options. Some of these include:

  • Putting some of your assets into Trust to remove them from your ownership and overall wealth
  • Utilising your gifts allowance to reduce the amount of savings you are keeping

Are care costs expensive?

Care costs can be expensive. Depending the type of care or type of support you seek, costs could range from £30 hourly for care professionals to in excess of £30,000 annually if a care home is needed.

There is support available through local council authorities for some. However, most need to self-fund their care planning. It is a good idea to plan for care if you may struggle with the expense in later life. For an idea of the average costs of care, take a look at our insight 'The cost of care'.

How do I arrange a Care Plan?

Speaking with a later-life adviser will provide you with the information and advice required to make a decision on to manage your care and support plans. It's equally as important to review all of your later life needs as it is to look after your current finances.

If you are not sure where to start, Sunny Avenue can help you find an adviser suitable to help. Complete our Sunny Fact Find to get started.

In some circumstances, the cost of care can be more expensive than the amount the benefit plan would pay. Care plans provide a minimum of £200 a month towards care, there may be a difference between the income received from a care plan and the actual cost of care. You would need to make up for the difference in costs.

The total payments made may be less than the premium paid to purchase the plan at the point of death. You will not be able to have the premium refunded.

You may be eligible for state-sponsored care. It can help with the costs of care, paid by the government. It is determined by your specific care needs as well as your total value of assets.

Financial care plans are complex financial products. It's a good idea to seek advice to discuss your circumstances. Plans are bespoke but vary from provider to provider. A later-life adviser would be able to help you understand your options and provide you with more information on whether a Care plan is right for you.

It may be an option to consider setting up a trust. A trust will move the ownership of the property from your name to someone else. This means, when costs of care are being assessed, the value of your assets will be less. This can make a difference when it comes to state support.



Finding Advice

Insights from the experts

Sunny Avenue

The Cost of Care

2 Mar 2023

What are the costs of Care? Will the NHS help you? Can a Care Plan help Finance these?

Sunny Avenue

Mortgage Lenders That Accept Universal Credit

29 Apr 2024

Mortgage Lenders That Accept Universal Credit

Sunny Avenue

How to Create an Indoor Garden: Easy Tips for Green Spaces at Home

18 Apr 2024

Indoor gardening is a wonderful way to bring the beauty of nature into your home or office space.

Sunny Avenue

What is Bartering? Exploring Alternative Ways to Exchange Goods and Services

18 Apr 2024

What is Bartering? Exploring Alternative Ways to Exchange Goods and Services.

Sunny Avenue

How to Future-Proof Your Home

18 Apr 2024

In today's ever-changing world, it's essential to future-proof your home to adapt to emerging trends and technologies.