A new study by LV= reveals that the average length of time we stay in a care home towards the end of our life has now stretched out to just over two and a half years.

Again on average, that’s enough to take £75,000 out of your funds… if your care needs are modest and you’ve managed to put that much away in the first place. For anyone needing higher levels of care during their stay, or electing to stay in a home charging above average rates, the stay could easily amount to well over £100,000.

So do you have plans in place to cover these costs?

The good news for those who have limited amounts of savings and assets – less than £23,250 (£25,250 in Scotland and £23,750 in Wales) – the local council will be obliged to cover the cost of your care. They will, however, ask you to contribute any pensions and allowances you may be receiving.

However, if you own your own home, and you do not have a spouse or dependent relative living in it, your home will form part of your assets, and you will be expected to sell it or make provision with your council that it will be sold in the event of your death and the money repaid.

There is also potentially good news for the relatively small number of people who qualify for Continuing Healthcare: the NHS will assume responsibility for the costs. But your health will have to be severely compromised to qualify for that – and you may well have to contest your case very doggedly indeed.

Then there is the whole business of choice: while you may qualify for local authority funding, you may not want to live in the home that your local authority chooses for you – either because you don’t feel it offers the quality of care you want or because it is inconveniently located for your family. You can elect to go for the “top up” option here, where your family accepts responsibility for paying the additional amount needed for you to stay in the home you choose.

According to LV=, some 38% of people who go into care currently pay their bills out of their savings, while 25% go for the top up option, and 22% end up selling the family home. That leaves a relatively small percentage relying solely on the council.

Not all of us end up going into a care home, of course. But even for those who manage to spend our last years in our own home there will almost certainly be bills to be paid in the form of visiting nursing and/or domiciliary care. Again, those with resources will be expected to foot this bill.

It makes sense, therefore, for anyone even in the early stages of retirement and faced with the prospect of paying for their own care, to at least consider making some sort of provision for it.

There’s often an assumption that, as we go deeper into our retirement years then our annual “running costs” will go down. That’s not necessarily so. While we might cut back on our leisure pursuits, or even let the car go, we may still face the prospect of paying for nursing or home help, or taxis to get us about.

If anyone is counting on help in the form of a cap on care fees coming in to save the day, they might well be disappointed. The implementation of that has been delayed now until 2020 – and may well get kicked out into the long grass well before we reach that point. It’s also worth remembering that the cap only applies to care costs themselves… accommodation costs aren’t taken into account, so you will still be liable for those.

There are ways to manoeuvre your finances so that you have money put aside as a contingency for care in later life – your financial advisor will be able to give you specific guidance on this depending on your circumstances. Options include taking out a care fees plan when you enter a home, so you don’t face an open-ended cost. The amount you pay will be based on how long you are expected to need care… so that can represent quite a large lump of money: on average they are around £100,000 according to specialist providers PayingForCare. Care fee plans are, though, exempt from Inheritance Tax.

You might also want to tuck away part of your resources to fund your care and then ensure that you live within your means until you reach that point.

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