Article last updated 5 September 2026.
Mapping client assets to care needs
There is no one-size-fits-all approach. Funding decisions should reflect each client’s assets, income, tax position and long-term objectives, alongside their preferences for care and lifestyle.
A clear understanding of how capital and income interact over time is essential to building a sustainable strategy.
Key funding routes
Advisers may consider a combination of approaches, including:
| Funding route | Potential role | Key considerations |
| Investments and savings | Flexibility and liquidity | Market movements, sequencing risk, withdrawal sustainability |
| Pension income | Regular retirement income | Tax treatment, withdrawal timing, sustainability |
| Property wealth | May provide capital | Transaction costs, suitability, impact on housing needs, equity release risks if relevant |
| Care annuities | Potential regular income | Product terms, health underwriting, loss of capital access, suitability |
Each option carries different implications for liquidity, flexibility and long-term outcomes. The most effective strategies often combine multiple funding sources to balance access to capital with income stability.
Care annuities in practice
Some care annuities are designed to convert capital into a regular income intended to help meet care costs. The suitability, cost and features of these products will depend on the client’s circumstances and the product selected. This can help manage the risk of running out of funds later in life and provide reassurance where care needs are expected to increase.
They may also affect the value of assets held within an estate, which advisers may need to consider alongside wider tax, care and legacy planning objectives.
Balancing flexibility and certainty
Advisers should stress-test plans against key risks, including longevity, market volatility and rising care costs.
Maintaining flexibility is important, particularly where care needs may change over time. At the same time, introducing elements of certainty, as income that may be guaranteed through specific products, can help ensure essential costs are covered.
A well-structured plan balances both, adapting as circumstances evolve.
