Article last updated 5 September 2026.
The role of investments
Long-term investing can play a key role in supporting future care costs. Growth and income strategies should be aligned with anticipated care timelines, evolving needs and each client's risk tolerance.
As part of any long-term financial plan, advisers should be mindful that investment values and income can fluctuate, and clients may receive back less than they originally invested. Building flexibility into investment plans can help clients respond to changes in health, longevity and market conditions over time.
Key pension rule changes
Based on current HMRC rules, the pension lifetime allowance has been abolished. However, limits apply to tax-free lump sums and the annual allowance.
Advisers should check the latest HMRC guidance before relying on current thresholds in client planning. These changes may create planning opportunities for some clients, but the right approach will depend on contribution limits, tax position, withdrawal strategy and long-term sustainability.
Integrating pensions into care planning
Pensions can provide an important source of income in retirement and may contribute towards meeting ongoing care costs. Advisers should consider:
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The sequencing of withdrawals across different assets
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The sustainability of income over the client’s lifetime
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The impact on tax and legacy planning
A coordinated approach ensures pension income supports both lifestyle needs and potential future care requirements.
Managing risk over time
Investment strategies should evolve as clients approach or enter later life care. For some clients, this may involve gradually balancing growth objectives with income generation and capital preservation, helping ensure funds remain accessible and resilient as circumstances change.
