Around one in three of us can expect to require residential care in our later years.

While the State can help with costs, eligibility is limited. In fact, only those with assets, including property, worth less than *£14,250 will get their care home fees funded in full. If you have assets worth more than £23,250, you'll be expected to foot the whole bill.

Click the button to get a free, no obligation care annuity quote.

In fact, even people who do qualify for support from the local authority can discover a shortfall between what a home costs and what the authority is willing to pay for that standard and level of care.

Currently, 39% of people who are in residential care are paying for it themselves.² It can be tempting simply to try to pay for care out of savings and pension income. But given the high costs mentioned above, savings could quickly be wiped out. It is therefore advisable to look for solutions that can generate income indefinitely without eroding capital right away.

The bad news is that care doesn't come cheap. Currently, a residential home costs over £24,000 a year on average. If nursing is required, that figure can easily rise to £35,000.¹ Such costs can quickly eat away savings. So it's important to look at funding solutions that can deliver income to help pay fees, while preserving capital.

Annuity-based plans provide a lot of certainty – although capital can't automatically be reclaimed if you die soon after the plan begins. One way round this is to look for plans that offer a six-month money-back guarantee and capital protection insurance for periods beyond this.

Planning for care involves a lot of major decisions so it's important to talk to your adviser as well as family members about your wishes. It is also sensible toarrange a Lasting Power of Attorney so the people you trust can make decisions about your care andfinancial well being, if you aren't able to. As many families have found, doing nothing could cost you everything!