Planning for care costs: what you need to know

One of the biggest financial risks in later life is the cost of long-term care, yet it's something many people simply don't plan for. Unlike NHS healthcare, social care in England is means-tested — meaning the amount of support you get from your local council depends on both your needs and your financial assets.

The means-test threshold. If your assets (including the value of your home, in most circumstances) exceed £23,250, you'll typically be expected to pay for your own care in full — known as being a "self-funder". Below £14,250, the council usually covers the full cost. Between these figures, you contribute on a sliding scale.

Typical costs. Home care from an agency typically costs £200-£400 a week for part-time support. Residential care homes average roughly £35,000-£55,000 a year, while nursing homes providing more intensive medical support typically cost £50,000-£80,000 a year — and costs vary significantly by region, with London and the South East generally more expensive.

NHS Continuing Healthcare. In some cases, where a person's needs are primarily health-related rather than social, the NHS may fund care in full regardless of assets. This is assessed separately and is worth investigating if significant health needs are involved.

Practical steps to take now.

• Set up a Lasting Power of Attorney for finances and health while you have capacity — this allows someone you trust to manage your affairs if you're ever unable to
• Understand whether your home would be included in any means test, and under what circumstances it might be disregarded
• Consider building a specific care contingency into your retirement savings plan
• Speak to a specialist care funding adviser if you're approaching a point of need

Care costs can derail even a well-planned retirement if they come as a surprise. Modelling a realistic care scenario now — even as a rough estimate — gives you far more options later.