One of the most common concerns people have when planning for later life is whether they will need to sell their home to pay for residential care.
With care home fees often running into thousands of pounds per month, it’s a valid worry. However, the reality is more nuanced than many people expect. In this guide, we explain when your home may be taken into account, and the options available to help protect it.
Will I Be Forced to Sell My Home?
Your local authority cannot automatically force you to sell your home to pay for care. In fact, there are several situations where your property may not be included in the financial assessment at all.
For example, your home is usually disregarded if it is still occupied by:
- Your spouse or civil partner
- A relative over the age of 60
- A dependent child under 18
- A relative who is incapacitated
- A co-owner of the property
In these circumstances, the value of your home will not be counted when assessing how much you need to contribute towards your care.
However, if none of these exemptions apply and you move permanently into residential care, the value of your home will usually be considered as part of your assets.
Understanding Means Testing
When you require residential care, your local authority will carry out a means test to determine how much you need to pay.
This assessment considers:
- Savings and investments
- Income (such as pensions)
- The value of your property (in some cases)
In England, if your total assets exceed £23,250, you will generally be expected to pay for your care in full.
If your assets fall below this threshold, you may qualify for financial support. There are also “tariff rules” for those with assets between £14,250 and £23,250, where contributions are calculated based on your capital.
It’s important to note that not all assets are included in the means test, and careful planning can make a significant difference to your financial position.
What If the Property Is Jointly Owned?
If your home is jointly owned, the situation becomes more complex.
Typically, only your share of the property will be taken into account in a means test.
Additionally:
- If the co-owner continues to live in the property and meets one of the exemption criteria, the property may be disregarded entirely.
- If the property is included, the value assessed is your share – not the full market value.
- The fact that the property is jointly owned can reduce its valuation, as selling a partial share is more difficult.
Understanding how your property is owned (for example, as joint tenants or tenants in common) is crucial when planning for care fees.
Deferred Payment Agreements
If your home is included in the means test, this does not automatically mean you must sell it immediately.
You may be eligible for a Deferred Payment Agreement (DPA).
This is an arrangement with your local authority where:
- They help cover the cost of your care
- The fees are effectively “loaned” against your property
- The amount is repaid later, usually when the property is sold or from your estate
A Deferred Payment Agreement allows you to delay selling your home, providing time and flexibility for you and your family.
Interest and administrative fees may apply, and eligibility criteria must be met, but it can be a valuable option for many families.
Equity Release Schemes
Another potential option is an equity release scheme, which allows you to access some of the value tied up in your home without selling it outright.
This can provide funds to help pay for care while allowing you (or your family) to retain ownership of the property.
However, equity release products can be complex and may affect:
- Your entitlement to benefits
- The value of your estate
- Your long-term financial security
For this reason, it is essential to seek independent legal and financial advice before proceeding.
Planning Ahead Is Key
The key takeaway is that you are not always forced to sell your home to fund residential care. However, without proper planning, your property may ultimately be used to cover care costs.
Early advice can help you:
- Understand your potential liability
- Explore available funding options
- Structure your assets effectively
- Protect your estate for future generations
At JWP Solicitors, we specialise in helping clients navigate care home fee planning with clarity and confidence. Our experienced team can guide you through your options and help you make informed decisions about your future.
Need Advice?
If you are concerned about care home fees or protecting your home, we are here to help.
Contact Us today for expert, tailored advice on planning for later life.
