Self-funding care: what you need to know
Self-funding care means paying from your own resources — savings, income, pensions or property. It applies to anyone whose capital is above the local authority means-test threshold. With careful planning, self-funders can stretch their resources further and avoid common, costly mistakes.
How self-funding works
If your relative's capital is above £23,250 in England (different thresholds in Scotland, Wales and Northern Ireland), they pay the full cost of care. There's no automatic check-in from the council — you'll arrange and pay providers directly. If capital later drops below the threshold, you can apply for council support at that point.
What "capital" includes
- Savings, ISAs and investments
- Property (in residential care, with important exceptions — see below)
- Premium bonds, shares, second properties
Income (pensions, attendance allowance, rental income) is treated separately and contributes to the weekly fee in addition.
When the family home is — and isn't — included
For care at home, the property is never counted. For residential care, it's counted unless one of the following applies:
- A spouse, partner or dependent relative still lives there.
- The first 12 weeks of permanent residential care (the "12-week property disregard").
- The council has agreed a Deferred Payment Agreement, deferring sale until after death.
Ways to pay for care
- Income drawdown — using pensions and rental income to cover the weekly fee.
- Capital drawdown — gradually drawing on savings or investments.
- Equity release — borrowing against the value of a property still being lived in by a partner.
- Immediate-needs annuity — a one-off lump sum that pays a guaranteed income for life direct to the care provider.
Why a care fees adviser usually pays for itself
Care fees planning is a specialist area of financial advice. A SOLLA-accredited Independent Financial Adviser can model how long resources will last, advise on annuities, and ensure benefits like Attendance Allowance and any partial council top-ups are claimed. We can introduce you to one for free.
Protecting against unlimited care costs — care fee annuities
One of the biggest fears for self-funding families is not knowing how long care will be needed — and therefore how much it will cost in total. A care fee annuity can remove that uncertainty by guaranteeing care fees are covered for life in exchange for a one-off lump sum.
Learn about care fee annuities →