Later Life Planning in the UK: A Complete Guide to Lasting Power of Attorney, Wills, Care Fees and Inheritance Tax

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Later life planning is not one task. It is several decisions — legal, financial, and personal — that protect you and your family when it matters most. Most people delay these decisions. They seem complicated, costly, or simply unpleasant to think about. The earlier you act, the simpler and cheaper they become.

This guide answers the questions we hear most often at Jermyn Taylor Private Client Services. What does a Lasting Power of Attorney actually do? How much does it cost? How do care home fees work? How does inheritance tax apply in 2026? Use the headings below to jump to what matters to you.

What is later life planning, and why does it matter?

Later life planning covers the practical steps that protect your wishes, your family, and your money. It matters if you lose mental capacity. It matters if you need long-term care. It matters when your estate passes on. Good planning typically covers four things:

A Lasting Power of Attorney (LPA), so someone you trust can act for you
An up-to-date will, so your estate goes where you intend
A clear understanding of care home fee funding, so a future care need doesn’t become a financial shock
Inheritance tax planning, so more of your estate reaches the people you choose

You don’t need to be elderly or unwell to start. In fact, early planning works best. If someone signs an LPA after a dementia diagnosis, it often comes too late. Signing one requires mental capacity.

Lasting Power of Attorney: what it is and what it costs

A Lasting Power of Attorney is a legal document under the Mental Capacity Act 2005. It lets you appoint attorneys to make decisions for you. This applies if you become unable to decide for yourself. There are two types. Most people need both:

Property and Financial Affairs LPA — covers bank accounts, bills, property and investments
Health and Welfare LPA — covers medical treatment and day-to-day care, and only takes effect if you lose mental capacity

Cost in 2026: the Office of the Public Guardian charges £92 to register each LPA. Both types together cost £184. A couple registering both types each will pay £368 in total. If your gross annual income is under £12,000, you may qualify for a reduced fee of £46 per LPA. Some benefit recipients qualify for a full exemption using form LPA120.

A solicitor or specialist firm can prepare the documents for you. This adds £150–£600 per LPA on top of the registration fee, depending on complexity. Registration currently takes 8 to 10 weeks. Allow plenty of time.

Why it matters: without an LPA, your family cannot simply step in if you lose capacity. They must apply to the Court of Protection for a deputyship instead. This process often takes several months. It can cost well over £1,000 in the first year, plus ongoing annual fees. Make one in advance, and you avoid all of this.

Care home fees: how the means test works

Care costs pose one of the biggest financial risks in later life. Self-funders typically pay around £1,300 a week for residential care and £1,600 a week for nursing care. Costs vary by region. London and the South East usually run 20–30% higher.

Whether your council contributes towards care depends on a financial assessment of your capital. This covers your savings, investments, and often your property.

England’s capital limits for 2026/27:

Below £14,250 — your capital doesn’t count; you pay from income only
£14,250–£23,250 — you contribute £1 per week for every £250 of capital in this band, plus most of your income
Above £23,250 — you fund your care in full

These limits haven’t moved since 2010. The government has no plans to raise them. As care costs and house prices climb, more people fall into self-funding every year. Scotland, Wales and Northern Ireland set different thresholds, so check the rules for your nation.

Many families worry about selling the home to pay for care. The rules do include it in the means test for permanent residential care. But this doesn’t apply if a spouse, partner, or certain dependants still live there. A Deferred Payment Agreement can also let the council cover costs against the property’s value. This helps you avoid a forced or rushed sale.

Inheritance tax: the 2026/27 thresholds

Inheritance tax (IHT) applies at 40% on the part of an estate above the tax-free allowance. For 2026/27:

The nil-rate band stands at £325,000 per person. It hasn’t moved since 2009, and the freeze will run for several more years.
The residence nil-rate band adds up to £175,000. It applies when a qualifying home passes to direct descendants — children, step-children, adopted children, or grandchildren.
Together, these give an individual allowance of up to £500,000. A married couple or civil partners can reach up to £1 million with the right planning.
The residence nil-rate band tapers away above £2 million. It falls by £1 for every £2 over that threshold.

These thresholds haven’t kept pace with house prices. As a result, more ordinary estates now face an IHT bill, not just wealthy ones. Families commonly reduce their exposure by:

Using the transferable nil-rate band between spouses and civil partners
Gifting from surplus income, which can leave the estate immediately rather than waiting seven years
Using the £3,000 annual gift exemption, with one year’s carry-forward if unused
Leaving at least 10% of the estate to charity, which cuts the rate on the rest from 40% to 36%

Inheritance tax planning works best alongside a clear, professionally written will. Without one, the rules of intestacy decide who inherits. These rules rarely match what people actually want, and rarely produce the most tax-efficient outcome.

Wills: the foundation of every plan

A will ties everything else together. It decides who inherits your estate, who acts as executor, and who would care for any dependent children. Add the nil-rate bands above, and it also shapes how much inheritance tax your estate may owe.

Roughly half of UK adults don’t have a valid will. Without one, the fixed rules of intestacy control your estate. These rules don’t recognise unmarried partners at all. They can produce surprising outcomes for blended families, step-children, or long-term cohabiting couples. Review your will every few years. Always review it after a marriage, divorce, house move, or the birth of a grandchild.

How Jermyn Taylor Private Client Services can help

Every family’s circumstances differ. The right approach depends on your assets, your health, your family structure, and what matters most to you. We work with clients on each of the areas above. That includes Lasting Power of Attorney, wills, care fee planning and inheritance tax. Together, we build a clear, practical plan well before you need it.

If this has raised questions about your own situation, get in touch. We’d be glad to talk it through.

Frequently asked questions

Do I need both types of Lasting Power of Attorney? Most people benefit from both. A Property and Financial Affairs LPA and a Health and Welfare LPA cover different decisions. Neither substitutes for the other.

Will I have to sell my house to pay for care? Not automatically. The means test usually includes your home for permanent residential care. But this doesn’t apply if a spouse or certain dependants still live there. A Deferred Payment Agreement can also delay a sale.

How much can I leave before inheritance tax applies? For 2026/27, an individual can typically pass on up to £500,000 tax-free. This combines the nil-rate band and residence nil-rate band. A married couple or civil partners can reach up to £1 million with the right planning.

What happens if I die without a will? The rules of intestacy control your estate. They follow a fixed legal order and don’t provide for unmarried partners.

Is it too late to plan once someone has dementia? It depends on the stage. An LPA requires the donor to have mental capacity when they sign. Act early. A GP or specialist can assess capacity if there’s any doubt.

This article offers general guidance only. It doesn’t constitute legal, financial or tax advice. Rules and thresholds change, and your own circumstances may affect how they apply to you. Please contact Jermyn Taylor Private Client Services for advice tailored to your situation.