A report in Financial Planning Today makes for interesting reading, as it reveals the number of ‘very old’ people in the UK has skyrocketed in recent years. According to the article, which was published in October 2025, the number of people aged 90 and over has increased by 54% since 2004.
It points to official figures from the Office for National Statistics which revealed that an estimated 625,000 people were aged 90 or above in 2025. Furthermore, the figure looks set to rise.
The increasing number of older people in the UK could have implications for the care sector, which will have to look after more of us as we get older and increasingly frail. This scenario looks likely when you consider a study by Age UK, which found two in every three people aged 80 and above have multiple long-term health conditions.
If you do need long-term care later in life, the cost could have a significant impact on your wealth. As a result, the amount you’re able to leave to your loved ones when you die could be substantially reduced.
Read on to learn more about the cost of long-term care and how you could prepare financially for it, as well as a little-known rule that you may need to know about.
Care costs could exceed £49,000 a year
According to Age UK, the average cost of a residential care home in the UK is more than £49,000 and more than £65,000 for a nursing home. The latter is different from a care home, as it uses registered nurses to care for residents, while the former normally uses assistants.
This means that if you require residential care for two years, it could cost around £78,000 if you’re in a care home, or £130,000 if you’re staying in a nursing home. If you prefer the idea of ‘independent living’ and wanted to stay in your own home, you could receive domiciliary care.
Age UK reveals that this could cost around £25 an hour, meaning one hour of support every day could cost a little over £9,000 a year. If you needed three hours care every day, it would cost more than £27,000 a year.
It’s likely that you’ll need to pay for your care
Under existing rules in England, if the value of your assets (including your home) exceeds £23,250, you will probably need to pay for your care. In Wales the threshold is £50,000 and in Scotland it's £23,000.
As there is no maximum to the amount you pay, you could end up paying substantial amounts in care fees in a relatively short period of time.
In England and Northern Ireland, if your assets (including property) are less than £14,250 you won’t have to pay for your care. In England and Northern Ireland, if the value of your assets is between £14,250 and £23,250, your care will be charged on a sliding scale.
There is no lower limit in Wales, and in Scotland it’s £21,500.
As your local authority is usually responsible for providing care, it may insist that your home is sold when you die so that the cost of the care can be repaid. This is typically done using a deferred payment agreement (DPA), which is an agreement that says the local authority will pay for your care but the equity in your home will be used to repay the charges.
As a result of the DPA, your family and friends could receive significantly less from your estate than you originally intended to leave them. It’s important to remember that there are strict rules around DPAs that set out when a local authority can, and cannot, ask you to enter into one.
For example, if your spouse is still living in your home the authority cannot insist you agree to a DPA. It’s usually a good idea to speak to a financial adviser before entering into a DPA, as they can confirm whether it’s right for you or not and what the implications might be for your loved ones.
It’s never too soon to prepare financially for your long-term care
While you might assume that long-term care is only for the elderly, in some cases it could be needed if you are diagnosed with a serious illness or have a life-changing accident. This means planning financially for your long-term care is likely to be a shrewd financial idea.
One way you might want to do this is to consider investing, as this can help to inflation-proof any money you put aside to help cover the potential cost of your care.
Furthermore, investing has historically tended to provide better long-term growth potential than cash savings, meaning it could boost the amount you have to fund your care. As a result, you’ll be better placed to choose the type of care you receive and where you receive it, instead of the local authority deciding for you.
Join our insightful webinar
On Thursday 13 November AFH will be hosting the next in its series of easy-to-understand webinars, titled: Building a long-term care plan that protects you and your family.
The online seminar will look at:
- What is long-term care and how much could it cost?
- Who pays for your long-term care if you need it?
- How are your assets and property assessed for care costs?
- Is it possible to prepare for the expense of long-term care?
Former BBC presenter Mark Foster will be joined by AFH’s Chief Advice Officer, Austin Broad, and long-term care expert and Founding Director of My Care Consultant, Jacqueline Berry.
Simply follow the link if you would like to register for what’s sure to be an informative and engaging event.
Get in touch
If you would like to discuss long-term care and how to prepare financially for it, please contact us on 0333 010 0008. We’d be happy to arrange a no obligation initial meeting with one of our independent financial advisers.
10 November 2025