A recent report from the Just Group (8 December 2025) suggests that many over-45s are underestimating the cost of care homes by thousands of pounds. Industry figures indicate that the average residential care home fees are nearly £66,500 per year. Yet 60% of over 45’s believe the annual care home cost would be less than £60,000, with 28% underestimating it by more than half.
Of those who have previously helped find care for a loved one, 85% said they were shocked by the high care home cost. With estimates showing that 4 in 5 people over 65 will require some level of care, thousands of families could be surprised by the bill they eventually face.
Understanding the True Cost of Care
Taxpayer support for care is means-tested, meaning many people must cover all or part of their care home costs themselves.
In England and Northern Ireland, anyone with assets over £23,250 is expected to pay their full care costs. If assets fall between £14,250 and £23,250, residents must contribute part of their income. Whether your home counts towards your assets depends on your circumstances.
In Scotland, personal and nursing care is free, but you may still need to pay for accommodation if your assets exceed £35,000.
In Wales, council contributions are available for assets under £50,000, but residents with higher capital must cover all fees.
A Care Plan Can Provide Peace of Mind
Although you may hope to avoid moving into a care home, incorporating the potential care home cost into your financial planning can give peace of mind. The Just Group report found that 73% of people said finding care was very stressful. Uncertainty over costs adds to this worry for both individuals and families.
Yet only 7% of over-75s have made provisions to cover their own care home cost. Those paying for care typically use:
- Savings or investments (59%)
- Pension income (48%)
- Proceeds from selling property (36%)
Planning Ahead Gives Greater Choice
Being proactive about covering care home costs can provide more options in the future. For example, 71% of people said being near family is important when choosing a care home. Having a care fund allows you to select a home that suits your lifestyle and preferences, including amenities that make later life more comfortable.
Talk to Us About a Care Plan
A tailored care plan can help you set aside funds to cover potential care home costs, giving you certainty and protecting your financial goals.
Contact us to discuss making care part of your wider financial plan.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
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