Can I protect the family home from care fees?

If a relative still living in the home is over 60, disabled, or a dependent child, the home is disregarded from the means test. Outside those exceptions, deliberate gifting to avoid care fees is treated as deprivation of assets and rarely succeeds. A specialist solicitor can advise on legitimate planning options.

Does Attendance Allowance affect other benefits?

No. Attendance Allowance is non-taxable and not means-tested. It does not reduce other benefits and may actually increase entitlement to means-tested benefits such as Pension Credit or Council Tax Reduction.

When should we set up Lasting Power of Attorney?

As soon as possible after a dementia diagnosis — and ideally before a diagnosis is even being discussed. LPAs can only be created while the person retains mental capacity. Once capacity is lost, the only option is a far slower and more expensive Court of Protection deputyship order.

Can dementia care be funded by the NHS?

Yes — through NHS Continuing Healthcare. Dementia by itself doesn't automatically qualify, but advanced dementia with significant behavioural, cognitive, or nursing needs often does. Many families miss out because they don't realise CHC applies to dementia.

Financial planning after a dementia diagnosis

A dementia diagnosis brings significant financial implications — care costs that may run into hundreds of thousands of pounds over the course of the condition, lost income for family carers, and complex decisions about benefits, property and inheritance. Acting early gives you options that disappear if you wait.

Last reviewed: 1 March 2025·Reviewed by: CareGuide UK Editorial Team, reviewed by an SOLLA-accredited financial adviser

Why financial planning after diagnosis is urgent

Dementia is a progressive condition. Decisions made early — while the person retains mental capacity — open options that simply do not exist once capacity is significantly reduced. That includes setting up Lasting Power of Attorney, taking informed financial advice, restructuring savings or investments, and updating a will. Acting in the first three to six months after diagnosis puts the family in a far stronger position than waiting for a crisis.

Attendance Allowance and other benefits

Anyone over 65 with care needs from a long-term condition such as dementia should apply for Attendance Allowance. It is non-means-tested, non-taxable, and worth £72.65 to £108.55 a week depending on the level of care needed. People under 65 should apply for Personal Independence Payment instead. Pension Credit, Council Tax Reduction, and Carer's Allowance for the family carer may also apply.

Lasting Power of Attorney — why it cannot wait

Setting up an LPA is the single most important financial step after a dementia diagnosis. Two LPAs are needed: one for property and financial affairs, and one for health and welfare. Without them, the family may face the slow, expensive, and stressful Court of Protection deputyship process to manage a relative's affairs. Read the full LPA guide →

Care costs — what to expect as the condition progresses

Early-stage dementia care often costs little beyond informal family support. Mid-stage typically requires home care of 10–25 hours a week, costing £400–£1,000 a week. Late-stage dementia almost always requires either residential dementia care (£1,200–£1,800 a week) or specialist nursing care (£1,400–£2,200 a week). Over the course of the condition, total care costs can exceed £200,000.

Protecting the family home

If a spouse, partner, or qualifying relative continues to live in the home, the property is disregarded from the means test. Beyond that protection, options for shielding the home from care fees are limited and often misunderstood — schemes promising to "ringfence" property are usually treated as deliberate deprivation of assets by the local authority. A specialist financial adviser or solicitor can identify legitimate options.

When to seek specialist financial advice

For families with combined assets above the means-test threshold, specialist advice from an SOLLA-accredited Independent Financial Adviser usually saves more than it costs. Care fee planning is a specialised field — most generalist advisers do not handle it.

Frequently asked questions

Specialist dementia care typically costs £1,200–£1,800 a week in a residential setting and £1,400–£2,200 a week in a nursing home. Home care with dementia-trained carers ranges from £25–£40 an hour. Costs rise sharply as needs become more complex.