If you need long-term care and have received a care support plan, the next step – if you think you might be eligible for some financial support – is to undergo a financial assessment, also called a ‘means test’.

This is where a financial-assessment officer from your local authority will ascertain your ability to pay for a care home or in-home care and decide who will pay the fees.

The thresholds for receiving financial support are generally quite low. If the total value of your assets is above the following amounts, and you do not qualify for NHS support, you’re unlikely to receive any funding from your local authority:

• £23,250 in England and Northern Ireland
• £28,750 in Scotland
• £50,000 in Wales (for residential care) or £24,000 (for in-home care)

You can find more detailed information on the thresholds here.

You’ll also be expected to use any income you have (for example, from a pension) to pay towards the cost of your care, minus a Personal Expense Allowance, which is the minimum you should be left with every week after paying for your care. However, these amounts are also very low. The rates for 2021/22 are:

• £24.90/week in England
• £29.30/week in Scotland
• £33.00/week in Wales
• £27.19/week in Northern Ireland

The means test will be carried out either at your home or online, depending on current COVID-19 rules. The assessment officer will ask you about the following:

• Your earnings, if you have any
• Any money you receive from pensions, both state and private
• Any benefits you receive
• All of your savings and investments (if they are held jointly with your partner, they will usually be treated as being divided equally between the two of you and only your share will be considered)
• Any property you own (the value of a jointly owned property will be divided between you according to the shares you have in it)

The value of your possessions or any life-insurance policies won’t be included in the assessment.

If you’re staying in your own property and receiving care there, you won’t need to include the value of your home in the assessment. The same is true if you’re moving into residential care but your spouse, partner or a dependent relative will need to remain living in your home.

However, in all other cases, the current market value of your property will be included in the assessment, minus any mortgage or loan you may have on it and minus 10% of its value if there would be costs involved in selling it.

Take some time to make sure you have all of the above information to hand, such as bank statements, share certificates, details of your pensions, and so on.

It’s often helpful to ask a trusted relative or friend to support you. They can also be with you during the assessment to make sure you answer everything accurately and give the full picture of your financial situation.

It’s also a good idea to speak to an expert financial adviser, if you haven’t already. They can help you to understand the full value of all your assets and how they will be taken into consideration in the means test.

After the means test, your council will write to you to let you know how much the care you need (as defined in your care-support plan) will cost and the amount you will need to pay towards it yourself. The three possible scenarios are:

• You have to pay 100% of the cost
• The council will pay 100% of the cost
• You have to pay something towards the cost and the council will pay the rest

If you disagree with the result, you can appeal to the council. Also, if your circumstances change at a later date, you can ask the council to review the financial assessment.

Some people are tempted to give away their property, savings or investments before taking the means test, in order to ‘hide’ their wealth from the assessor. However, this is called ‘deprivation of assets’ and is not allowed.

Local authorities are clamping down hard on this. If they believe you have deliberately given away your assets with the aim of avoiding care-home fees, they will assess you as if you still had everything. This could leave you in a terrible situation – where you must fully fund your own care but have given your assets to someone else, who has no obligation to meet the cost of your care needs.

We therefore strongly recommend that you do not do this, and always seek financial advice before deciding what to do with any of your assets.

We are able to guide you through the entire process of finding and funding care, thanks to our broad expertise in later-life planning and our relationship with Care Sourcer, which has extensive knowledge of the UK care systems.

We can also help you to understand the long-term picture – whether you’ll pay your own care fees, the council will be funding you or a combination of the two – to ensure you won’t run out of money during your lifetime.

The services provided by Care Sourcer are separate and distinct to those offered by St. James's Place.