7 smart ways to fund later-life care without selling your home

Like many people, you may worry about having to sell your home to cover care fees.

In fact, LV= Adviser found that 67% of UK adults are worried about care costs, while 63% are concerned they will run out of money altogether.

And it’s not hard to see why. While care fees vary depending on your location and the type of care needed, Carehome.co.uk reports that residential care costs £1,298 per week on average, as of November 2025.

In south-west England, fees can be even higher, at an average of £1,339 per week. With such high costs, you may be understandably concerned that you’ll need to release equity from your property to pay your care fees.

Even so, being forced to sell your home to fund your care later in life isn’t a given. Read on to discover seven ways you might be able to pay for your care without having to sacrifice your home.

Your funding eligibility is determined by a means test

To determine whether you need to fund your own care, the council will typically assess your savings, investments, pensions, property, and any other income sources in a means test.

The point at which you typically need to pay for your own care varies by country. In England as of 2025/26, you can generally receive full state funding if your income and capital fall below the lower capital limit (LCL) of £14,250.

Meanwhile, if your assets exceed the upper capital limit (UCL) of £23,250, you will likely have to self-fund your care. If you fall between the two thresholds, partial funding may be available to help you pay your care fees. The value of your property may be included in these calculations, except in certain circumstances (explained later in the article).

It’s worth noting that, if you give your home away before going into care, it may be considered a deliberate deprivation of assets. This could mean the property is still included in your means test.

If this were to happen and you can’t sell it because you’re no longer the owner, you could be both unable to fund your care and ineligible for funding support.

Fortunately, you may still be able to fund your care without sacrificing your home.

1. Explore options for needs-based funding

Some funding may be available without means testing. The table below outlines some of the funding you may be eligible for in England as of 2025/26, depending on your needs:

While you cannot be certain you will be eligible for funding should you need care, in some cases you may be able to avoid selling your home by receiving support.

2. If someone else will continue to live in the property, find out if it could be excluded from your means test

In some circumstances, your home could be excluded from your means test if certain people will remain living there after you go into care, such as:

• Your partner or ex-partner, if the property is jointly owned
• A dependant or vulnerable person, such as a child under 18, a family member over 60, or a disabled relative.

However, once the person is no longer living at the property, it could be included in a means test reassessment. As such, you’re not guaranteed to retain your home indefinitely.

3. Consider receiving care at home, if possible

If you’re able to receive the care you need in your own home, the property won’t be considered an asset that can be used to pay your fees. As such, it will usually be excluded from your means test.

However, receiving care at home isn’t always an option. It will depend on your needs and whether your home is suitable – or whether it can be adapted to make it suitable – for you to continue living in.

4. Delay the sale of your home while you’re in care

Should you be unable to fund your care without selling your home, you may wish to set up a deferred payment agreement.

Typically, the local authority lends you a portion of your care costs. Repayments are usually taken from the sale of your house (or elsewhere in your estate) after you pass away, often with the addition of interest and administrative charges.

While this may not be suitable if your goal is to pass your home on to the next generation, it could help you retain the property for longer.

5. Rent out your home, rather than sell it

Rather than selling up to fund your care, you could opt to use the property to generate rental income.

This can be an effective way to pay your care fees without sacrificing your home, but it’s important to consider the costs and administrative burden. Your rental income will likely be taxed, and you may incur other costs, such as for agents and maintenance.

Depending on your health when entering care, you may need a trusted person to manage the rental for you. If this is your plan, it could be worth including your wishes in a Lasting Power of Attorney. That way, your attorney will have the legal authority to make decisions about your home and act on your behalf if you lack the mental capacity.

6. Factor the cost of care into your retirement plan

If passing your home on to the next generation is a priority, it could be worth accounting for the cost of later-life care in your retirement plan.

By getting started early and calculating how much you might need to save for care fees, you could help set enough funds aside to pay for care without sacrificing your home.

In addition to saving more, you might consider revising your retirement goals. For example, you might choose to live more modestly. Ultimately, it comes down to balancing your priorities so you can meet all your needs throughout retirement.

Of course, you might end up not needing care at all, meaning you may have saved and sacrificed unnecessarily. However, it could mean you have more wealth to pass to the next generation – along with your home.

7. Consider a deferred or immediate needs annuity

If you’re keen to get peace of mind that you will be able to fund your later-life care without sacrificing your home, it could be worth considering a deferred or immediate needs annuity.

These types of insurance products usually make up the difference between your income and your care costs, with tax-efficient payments made directly to your care provider.

However, these annuities can be costly and you’ll typically pay for one up front with a lump sum. Usually, the decision is irreversible, meaning you can’t reclaim this lump sum if you change your mind. As such, it can be worth seeking financial advice before committing to an annuity.

Get in touch

If you’re worried about funding care costs later in life, get in touch to find out how we could help you achieve peace of mind. Email enquiries@jesellars.co.uk or call 01934 875 919 to speak to our team.

 Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients 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.

The Financial Conduct Authority does not regulate tax planning or Lasting Powers of Attorney.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.