Invest for income


Few people can pay for long-term care purely out of their pension and other regular income. That’s why some people consider investments as a way to generate income for paying for care.

As a first step, you can see if you can arrange your assets to produce a steady stream of income. This way of paying care fees can involve either new or existing investments. These investments can generate investment income, investment growth – or both.

For many, this offers a flexible way to cover the cost of their care fees.

If you’re moving into a care home and live alone, you can sell your home. You can then invest the money from the sale in assets such as:

  • government bonds
  • shares, or
  • unit and investment trusts.

These investments can pay out regular returns to help pay for your care fees. It’s a good idea to consult a specialist financial adviser to help you decide on suitable investments.

Advantages on investing for income

  • By taking on more risk, you should be able to create more income than savings would. However, your investments may not perform as expected.
  • You may be able to retain your capital and only use the returns it generates to pay your care fees. This can allow you to save your capital to pass on to children or other beneficiaries.
  • If you didn’t need to sell your home to raise moneyto invest, you should be able to keep your property and pass it on to the next generation.

Disadvantages of investing for income

  • You can’t predict the returns from investments. This means the income produced may not cover the cost of care fees harming your financial position.
  • The value of all investments can fall as well as rise.
  • You may have to pay tax on your investment pay-outs.
  • If your investments perform at a lower than expected level and you need to use some of your capital to plug the gap, you may be left with insufficient capital to continue generating income to fund your care.
  • Some investment products can be medium to high-risk. This means they must be held for a minimum period (typically five years or more).
  • In periods of high inflation, the value of your invested capital could be eroded.
  • You’ll need to keep your investment portfolio under regular review.
  • If you use a third party to manage your investments there’ll be fees to pay.

Get specialist advice

It’s a good idea to get specialist advice from a qualified and experienced financial adviser. 

A specialist care fees adviser will:

  • be able to discuss the best ways to protect your assets
  • look at how to make sure your money lasts for as long as is needed, and
  • let you know about products specifically designed to help with paying care costs.

Find an adviser

Use our directory of specialist care fees advisers to find expert advice in your area.