Most of us would rather not think too hard about needing care in later life, and that’s understandable. But a report from Just Group – its 13th annual Care Report, published in December 2025 – suggests the gap between what people expect care to cost and what it actually costs is large enough to catch families badly off guard. Around 6 in 10 over-45s believe a year in residential care would cost less than £60,000, and more than a quarter underestimate the true figure by over half. Industry data puts the actual average at closer to £66,500 a year – and, as we’ll come to, that’s before you even factor in what care tends to cost specifically here in Dorset.
Of those surveyed who’d already been through the process of arranging care for a loved one, 85% said they were shocked by the cost. With an estimated 4 in 5 people over 65 expected to need some level of care before they die, this isn’t a niche concern – it’s one most families will face in some form, whether or not they’ve planned for it.
What care actually costs closer to home
National averages only tell part of the story, because care costs vary a great deal by region – and Dorset sits well above the England average on both counts. Current fee data puts self-funded residential care in Dorset at around £1,654 a week, or roughly £86,000 a year – about 28% higher than the England average. Nursing care runs at around £1,514 a week, or close to £78,700 a year, around 5% above the national figure.
For context, local authorities themselves typically pay providers considerably less than this – nearer £1,173 a week for residential care and £1,074 for nursing care – which goes some way to explaining why self-funders are often charged a noticeably higher rate than council-funded residents in the same home. With around 121 care homes across the county, there’s a reasonable range of options locally, but it’s worth planning around the real, regional cost rather than a national average that may understate what you’d actually pay.
How much of that will the state actually cover?
According to the Just Group report, 67% of people were surprised by how little financial support the state provides – and taxpayer support is, indeed, means-tested fairly tightly. In England and Northern Ireland, anyone with assessable assets above £23,250 is expected to fund their care in full, and you’ll still need to contribute from income if your assets sit between £14,250 and £23,250. These thresholds have not risen since 2010, and reforms under the Health and Care Act 2022 that would have raised the upper limit to £100,000 remain indefinitely delayed.
It’s also worth knowing that the widely publicised £86,000 lifetime cap on personal care costs – originally due to start in October 2025 – was scrapped by the government in 2024 rather than merely postponed, so it isn’t something to plan around. A separate independent review, the Casey Commission, is now looking at longer-term reform of the whole system, with an initial report expected during 2026, but any resulting change is likely to be years away and won’t help anyone facing a care decision now.
In Scotland, personal and nursing care itself is provided free of charge regardless of means, though you may still need to pay for accommodation and other costs, and support with these tapers off once your assets exceed £35,000. In Wales, the position is more straightforward: if your capital is below £50,000 it’s disregarded entirely for care home charging purposes, while £50,000 or above generally means funding the full cost yourself.
Why gifting assets early isn’t a reliable shortcut
Given how much of the cost falls on individuals, it’s a natural instinct to wonder whether gifting assets to family sooner rather than later might reduce a future care bill. This is worth being genuinely careful about. Local authorities have the power to investigate what’s known as “deliberate deprivation of assets” – essentially, giving away or spending money specifically to avoid or reduce a care charge – and, if they conclude that’s what happened, they can treat you as still owning the asset for means-testing purposes, known as “notional capital”. That can leave you assessed as a self-funder with no local authority support, even though the money itself is genuinely gone.
Two things catch people out here. First, unlike inheritance tax gifting rules, there’s no fixed time limit that puts a gift safely out of reach – a council can, in principle, look back years, provided it can show that avoiding future care costs was a significant motivating factor at the time, not necessarily the only one. Genuine reasons for giving money away – helping a family member onto the property ladder, clearing a debt, an early inheritance gift made with no thought of future care needs – are meant to be properly considered rather than assumed away, but the onus is on demonstrating that context if it’s ever questioned.
Second, if deprivation is established, the local authority can in some circumstances pursue whoever received the gift directly, for the value they received, for up to six years. None of this means gifting is off the table as part of good planning – it very often remains sensible – but it needs to be done as part of a considered financial plan, not as a hurried response to a care bill you didn’t see coming.
Making care part of your financial plan
The Just Group report found that 73% of people said finding care was very stressful – and not knowing whether you can actually afford it, or how it might affect your wider plans, tends to make that worse for everyone involved. Yet only 7% of over-75s have made specific financial provision for care. Among those who do fund their own care, the most common sources are savings and investments (59%), pension income (48%), and proceeds from selling property (36%) – all things that can be planned for in advance rather than worked out under pressure.
There’s a genuine upside to planning ahead beyond simply having the money available. Around 71% of people said having a care home close to family mattered to them, and having funds already earmarked can mean you’re choosing a home on that basis, and for the amenities that suit you, rather than being guided primarily by what’s immediately affordable at a difficult moment.
Contact us to talk about your care plan
As financial planners based in Poole, we help clients across Bournemouth and the wider Dorset area build care costs into their wider financial plan, so it’s a choice made calmly in advance rather than a scramble later on. If you’d like to talk through what this might mean for you or a family member, we’re always happy to have a no-obligation conversation.
Get in touch to talk about making care part of your wider financial plan.
This article is for general information only and does not constitute advice. The information is aimed at individuals only. All information is correct at the time of writing (September 2026) and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of current legislation and guidance, which is subject to change.
The Financial Conduct Authority does not regulate long-term care fee planning, will writing, or some forms of estate planning.