30/01/2026
Many people have concerns over care fee cost, for not only themselves but for elderly family members. There are many companies advertising 'lifetime trusts', where you place your property into trust to avoid care home fees. Lifetime Trusts are not for that sole purpose and correct advise is required, before considering this course of action.
Also many people begin to pay care fees, when on occasions you my be eligible for FREE care or reduced fees.
One of my specialist colleagues, in care fees has provided the below genuine report on a recent case. He has helped several of my clients in the past.
A COSTLY MISTAKE
When Mr P needed to move to residential care, his children looked at his finances to see how best to fund the fees of £1,600 per week. His income was only £350 weekly, he had £32,000 of savings, £120,000 in a pension pot and jointly owned his home with his wife, meaning their home could not be used for his care fees.
The family understood because he had savings in excess of £23,250 he would be expected to pay care fees in full from those savings. The pension pot was also mistakenly classed as savings, from which they withdrew a 25% tax free lump sum which increased his savings to £52,000, from which care fees were paid.
Once savings were exhausted Mr. P’s annuity was £6,300 per annum whereas before taking the lump sum, at 7% [for example] it would have produced income of £8,400 per annum. The most significant effect however has been on Mrs P because family failed to realise, 50% of the pension income should have been reserved for her.
She now receives £1,050 per annum less from her husband’s pension than had the 25% not been removed for care fees which for a retiree trying to run her home on just one income is significant loss.
Long-term care is very complex and costly mistakes can easily be made if professional advice is not sought before taking action.
