Do I Have to Sell My Home to Pay for Care?

If you’re thinking about moving into a care home, then you’re not alone. The latest data shows that nearly half a million people in the UK live in care homes. One of the biggest concerns many people have is whether they’ll have to sell their home to cover the costs of care.

This guide breaks things down simply so that you know exactly where you stand when it comes to paying for care and your home.

Does Moving into Care Mean I Have to Sell My Home?

Not necessarily. Whether you end up having to sell your home depends on a couple of different things - most importantly, how much money you have and whether anyone else lives in your home.

Your local council will first carry out a care needs assessment (to determine your care needs), followed by a financial assessment. They’ll look at your capital and income like your pensions, savings, investments, property and any benefits you’re eligible to receive (even if you’re not currently claiming them).

This is to calculate how much you can afford to contribute toward your own care. Some types of benefits, however, are not included in the financial assessment such as Disability Living Allowance or Personal Independent Payment.

If your capital is more than £23,250, you’ll most likely have to pay for your care fees in full. But if your capital is below £23,250 you could get some help from the local council, while still having to contribute to the costs yourself.

In England, if you’re permanently moving into a care home and no one else lives in your home, the value of your home might be included in the assessment.

When is your Home Not Counted in the Assessment?

Sometimes the value of your home might not be included in your financial assessment in what is called a property disregard.

Your home won’t be included if a qualifying person or people live there, such as:

• Your spouse, partner or civil partner
• A dependent
• A close relative aged 60 or over
• A close relative who is disabled and receives or meets the criteria for:
• Attendance Allowance, Pension Age Disability Payment, Disability Living Allowance, Severe Disablement Allowance, Armed Forces Independent Payments, Constant Attendance Allowance, Personal Independent Payment, Adult Disability Payment, Incapacity Benefit or a similar benefit

There could be other disregards too depending on your situation. The rules can sometimes be complicated which is why it’s best to speak to your local council and ask them if you’re unsure.

What About Couples or Joint Homeowners?

If you own your home with someone else, like a spouse or partner, only your share of the house may be considered during the means test. But if your partner still lives there, the home will usually be disregarded.

If you both decided to move into a care home at the same time, then the full value of the property might be counted.

Can I Give Away My House to Avoid Care Fees?

Some people consider gifting their home to children or family in an attempt to avoid care fees but local authorities are aware of this.

If your council believes you’ve given your assets away deliberately to try and reduce your care bill, they could treat it as a deprivation of assets. This means that they will calculate your fees as though you still own your home.

There isn’t a specific time limit on how far back the council can look to check records so this approach might not be effective and could backfire.

What if I Do Need to Sell?

If your home is included in the assessment and you need to sell it, you don’t always need to do it immediately.

You might be eligible for what’s known as a 12-week property disregard which means the council helps to pay for your care for the first 12 weeks while you sort things out.

After that, you might qualify for financial support through a deferred payment agreement or short-term loan.

How Do Deferred Payment Agreements Work?

A Deferred Payment Agreement is a formal agreement between you and your local council. It allows you to delay selling your home by borrowing money to pay for your care instead. This means:

• You don’t need to sell your home immediately
• The council pays your care home fees upfront
• The costs are recovered later, usually after your house is sold or from your estate

This can help to ease the burden for you and your family. While not everyone is automatically eligible for a DPA, you can usually get one if:

• You’re permanently moving into a care home
• Your home is being counted in the financial assessment
• You have little to no other savings
• Your home isn’t being occupied by a qualifying individual

There might be a set up fee and interest charges involved. The council will often place a legal charge (similar to a mortgage) on your property.

Make sure that you speak to your local council and get a clear breakdown of costs as well as terms and conditions before you sign anything.

Alternatives to Deferred Payment Agreements

Short-Term Loans from the Council

You might be able to apply for a short-term loan from your council. These loans help cover care costs while you’re figuring out longer-term options like selling or letting your home, or applying for a full deferred payment.

Short-term loans can:

• Cover fees while your property is in the process of being sold
• Act as a stopgap before entering a DPA
• Help avoid rushed financial decisions

Your agreement would still be with the council but instead of the council directly paying the care home, you’d use the installments they lend you to cover the costs yourself.

You might also be able to secure a short-term bridging loan from a private company. But these loans can be expensive because you normally have to pay fees and high interest rates so it’s best to get independent financial advice before taking out any loans.

Setting up Payment Plans

An alternative option to consider could be an Immediate Needs Annuity or deferred care fee payment plan which are essentially insurance policies.

The policy pays a regular income towards care costs, for the rest of your life, in exchange for a lump-sum investment.

In order to get an annuity, you could potentially use the value of your house to secure a loan.

Renting Out Your Home

Putting your home up for rent could be an option to consider. The rental income might help you cover some of the care costs and you wouldn’t need to sell the property. But you would still need to consider:

• Tax that has to be paid on rental income
• Repair, maintenance and landlord responsibilities
• Whether the rental income generates enough income to cover care costs

Using Equity Release

Equity release is another option that could allow you to borrow against your home’s value while still owning it. But this is a complicated financial decision and you should only consider it after getting proper financial advice.

How HelpAlert Can Help

At HelpAlert, we believe staying independent should never mean facing life alone. Our monitored personal alarms provide 24/7 UK-based support, automatic fall detection, and GPS protection both at home and outdoors, helping people live more confidently while giving families extra peace of mind.

Whether it’s a trip to the shops, a walk with the dog, or simply living independently at home, help is always just the press of a button away.

If you’d like to see how the service works, we offer a 14-day trial with no long contracts and only a small postage charge to get started.

Call our friendly UK Care Team on 01273 055049 or explore our monitored alarm range below to find the right option for you or your loved one.