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What Happens to Your Private or State Pension When In a Care Home?

If you’re considering moving into a care home, the process of choosing the right care home for you can be overwhelming and the admin involved can seem complicated. One of the concerns can be the cost as paying for a care home can be expensive. 

Of course, you may be eligible for financial help from your local council and in some cases, the NHS may help with the finance, but understanding your financial situation and putting plans into place early is key. 

As you consider your finances, you may wonder how moving into a care home will affect your state and private pension. 

We explain how this depends on a number of factors, including:

  • Whether your partner will still be living in your property 
  • If you’re paying your care home fees yourself
  • The possibility that you’ll have financial help for care home fees from the NHS
  • If you’ll be getting help from the local authority to pay your care home fees

How your state pension is affected when in a care home

Do you still get a state pension if you’re in a care home?

If you’ve reached state pension age, you’ll still get a state pension if you’re in a care home.

If you’re a woman born before 6 April 1953, or a man born before 6 April 1951, you can claim the basic state pension of around £137.60 a week.

If you were born after these dates, you’ll be entitled to receive the full new state pension (approximately £179.60 a week), but the exact amount depends on your National Insurance Record. 

Will my state pension be affected by how the care home fees are paid?

If you’re paying all the care home fees yourself, you’ll continue to receive your state pension as normal.

If the local authority is paying some of the care home fees, your state pension will be included as income in a financial assessment when they’re calculating how much of the fees you can pay. Your pension will then go towards your care home fees. 

To make sure that you have enough money left over to live on each week, a Personal Expenses Allowance (PEA) will be given to you from your pension. This allowance can be increased by the local authority in special cases. The amount varies across the UK and increases along with inflation. 

How your private pension is affected when in care home

Do I still get my private pension if I’m in a care home?

If you’re paying for your care home fees yourself, you’ll continue to receive your private pension, however, your private pension will be included within your savings and assets during a financial assessment by the local authority. 

If your partner is still living in your property when you’re a permanent resident in a care home, then you can give your partner half your private pension and this will not be included in the financial assessment. 

Do you get pension credit in a care home?

What is pension credit? 

Pension credit is a tax-free, means-tested benefit for those who have reached state pension age and are on low incomes. 

It’s made up of two parts. You can qualify for one part, or both:

  1. Guarantee credit – this is the main part of pension credit, giving you a financial top-up to your weekly income (to a minimum guaranteed level.)
  2. Savings credit – for those who reached state pension age before April 2016, there’s an extra financial boost available. You’re eligible for this if you’ve planned for your retirement with a private pension, work pension or savings.

Will moving into a care home affect my pension credit?

When you move into a care home, your pension credit will be worked out as if you were living at home.

You’re treated as a single person for pension credit if you move into a care home permanently, even if you’re in a couple, but you’re still treated as a couple in terms of pension credit during respite stays.

We’re here to help you

The Fremantle Trust puts the person at the heart of all we do, using our expertise, professionalism, kindness and compassion. Our services include care homes, extra care, residential care and supported living schemes across Buckinghamshire, Bedfordshire, Berkshire, Hertfordshire and Milton Keynes.

If you’d like further information or advice, contact The Fremantle Trust today or phone 0333 005 8735 to speak with a friendly advisor.

We have care homes located across the Buckinghamshire county. Learn more about care homes nearest to you:
Care home Aylesbury
Care home Princes Risborough
Care home Chalfont St Peter
Care home Amersham
Care homes Slough
Care home Chesham
Care home Stoke
Burnham care homes
Care homes High Wycombe
Care homes Marlow