How to pay for care

As we live longer, our care needs grow. How can we pay for later life care?

For many, local authority funding is not enough

As the costs of care continue to rise, it is becoming clear that many people have underestimated – even ignored – their future care needs.
While there is local authority funding available, for many it’s not enough to pay for the level of care they want.
In this article we’ll explore the costs of care and ways to pay for it.

The cost of care

Our care needs change over time, and for many care begins when we are still living in our own home with an at-home carer. According to the UK Aged Care Guide at-home carers charge between £15 and £30 an hour.

24-hour care at home is called live in care and typically costs upwards of £800 per week.

Residential care home costs can be very expensive. According to Age UK costs average around £600 per week for care homes and £800 per week for residential care.

At-home carer £15 - £30 per hour
Live-in care £800 per week
Care home £600 per week
Residential care £800 per week

Paying for care

A long-term care plan or a care fees annuity can provide care payments for the rest of your life, offering you and your family peace of mind that care funding won’t run out. Sometimes these payments can be made directly to the care provider.

The cost of an annuity depends on current annuity rates as well as age, health and the expected costs of care. The UK Care Guide estimates that it would cost a 70 year old £135,000 to buy a care annuity to pay an income of £10,000 per year, dropping to £55,000 at age 85.

Annuity payments are usually fixed and care home fees are likely to rise, but a specialist care fees adviser may be able to reach an agreement with a care provider to factor in cost rises in the cost of the annuity.

Using property to pay for care


Downsizing could be one of the best ways to release equity to pay for care. It’s a popular move, with many people moving into smaller homes as they reach their later years.

Deferred payment

If downsizing isn’t an option some local authorities will consider ‘deferred payment’ agreements for care, where the local authority will foot the bill for care cost upfront but recoup the money from the sale of your home after you die.

Lifetime mortgage

A lifetime mortgage could also be useful in paying for care. A lump sum lifetime mortgage could be used to buy a long-term care plan or care fees annuity.


A drawdown lifetime mortgage could be used to release money from your home. This can be convenient for paying for care and can allow interest to grow more slowly.

Could a lifetime mortgage work for you?

Find out how much equity you could release from your home.

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See how much equity you can release

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Maximum loan amount:

Important: The loan amounts above are an illustration of the amount you could borrow. The actual amount may vary depending on your individual circumstances. The figures are not guaranteed and do not constitute an offer to lend. The loan amount will need to pay off any existing mortgage secured against the same property.