Social care isn’t free. You might have to pay some or all of the cost of your care.
Your local council will work out how much you can afford to contribute towards your care costs. They’ll look at:
If you leave money in a pension pot, your local council won’t count this when they work out how much you can afford to pay for care.
However, once you’ve reached your State Pension age, your local council will assume you’re receiving an income from your pension.
Your State Pension age is the earliest age you can start receiving your State Pension. To work out your State Pension age go to GOV.UKOpens in a new window
If you don’t take an income, they’ll check how much you’d get if you bought a guaranteed income for life (an annuity). They would then use this amount when they work out your income.
Are you using your pension flexibly by keeping it invested and taking an income from it? Then your local council would look at how much you’d get if you bought a guaranteed income for life (an annuity).
Depending on how much you withdraw from your pot, they might class it as capital or income in the assessment of how much you need to pay towards care costs.
If you take lump sums or your whole pot in one go and put it into savings or invest it, your local council will treat it as an asset and include it when they work out what you can afford to pay.
If you deliberately spend or give away money (including tax-free cash) from your pension pot to get or increase help with care costs, your local council might assess your finances again. They might treat you as still having that money.
Call our helpline free on 0800 011 3797 or use our webchatOpens in a new window. One of our pension specialists will be happy to answer your questions.
Our help is impartial and free to use, whether that’s online or over the phone.
Opening times: Monday to Friday, 9am to 5pm. Closed on bank holidays.
This article is provided by the MoneyHelper.
