The saving habit that cost Michael’s parents £400,000

Here’s how it works

Local councils only help pay for care once your savings and assets fall below a set amount. In England, that line sits at £23,250. Above it, you cover the full cost yourself. Below it, the council starts to contribute. Michael found this out through a conversation with a friend whose parent’s care was fully covered, simply because they’d saved less over the years.

Luckily, there was a way to plan around it. Michael’s situation wasn’t fixed: he still had time, and time is what made this solvable.

He sat down with a financial adviser to look at his own retirement with fresh eyes. Rather than leaving his pension and savings sitting as one large, untouched pot, he restructured how and when he draws from each part, so a portion is genuinely accessible if he ever needs care, instead of tied up in investments he’d have to unwind in a hurry. He also looked at protection options built specifically to cover future care costs, so he isn’t relying purely on whatever happens to be left in his estate at the time.

It now means Michael has a real answer to the question his parents never got round to asking: what happens if I need care later in life? He knows roughly what it would cost, where that money would come from, and what would still be left for the people he wants to pass something on to.

Figures are illustrative only. Your own numbers depend on your individual circumstances and may change if tax rules change. Michael is a fictional case study.