The short answer
A corpus is the sum that has to exist on the day you are no longer providing, such that drawing from it covers your child's care for the rest of their life. It is almost always smaller than the headline lifetime cost, because the money remaining continues to earn while it is being spent. That single fact surprises most families and is the reason a total that looks impossible is often not.
What determines the figure is the relationship between three things: how much is drawn each year, how fast those withdrawals grow with care inflation, and what the corpus earns after inflation and tax. The gap between the real return and the growth in withdrawals is what decides whether the fund survives forty years or empties in eighteen. The headline return matters far less than that gap — a high return paired with high inflation is not progress.
This is also why a corpus should be tested rather than calculated once. The important question is not "what does it need to be if everything goes to plan" but "what happens if the first decade goes badly". A fund drawn down through an early period of poor returns can fail even when the long-run average was fine, because the withdrawals happen anyway while the balance is low. Testing that is more useful than refining the central estimate.
The practical output is a range with reasoning attached, not a single number — and an understanding of which assumption your plan is most sensitive to.
What changes the answer
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Annual withdrawal, in today's money
The starting draw. Everything else scales from it, which makes getting the underlying cost figure right the first job.
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Care inflation applied to withdrawals
Withdrawals do not stay flat. They grow, usually faster than headline inflation, for the whole period.
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Real return after inflation and tax
Nominal returns are misleading over decades. What matters is the return net of inflation and tax — often much lower than the number quoted.
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The number of years the corpus must last
The difference between funding thirty years and sixty is not double. Compounded, it is far more.
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Sequence of returns in the early years
A poor first decade while withdrawals continue can exhaust a fund that a good first decade would have sustained indefinitely.
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Other income reducing the draw
A pension, benefit or rental income lowers the withdrawal directly, which reduces the required corpus disproportionately.
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Whether the corpus also has to buy housing
A fund that must purchase or rent a home carries a large early cost that changes the arithmetic entirely.
What parents often miss
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Confusing the corpus with the lifetime total
Adding up sixty years of costs produces a number families conclude is hopeless. The corpus required is meaningfully smaller, because the balance keeps working.
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Planning with nominal returns
A return that looks comfortable before inflation and tax can be close to zero after both. Corpus maths only works in real terms.
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Assuming the drawdown is managed well
A corpus is only as good as the person administering it. Who will manage it, under what authority, and with what instructions is part of the answer — not a separate question.
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Ignoring what happens if the corpus runs out
A plan should say what the fallback is. Silence there is itself a finding.
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Treating the number as fixed
Costs, conditions and returns change. A corpus figure is a working estimate to revisit, not a target to set once.
Why the corpus is smaller than it looks
A father adds up his daughter's projected care across her expected lifetime and arrives at a total so large he stops looking at it. On that basis the plan is impossible and he puts it away for another year.
Modelled properly, the picture is different. The corpus required — invested, earning a modest real return, drawn down as needed — is a fraction of that headline total, because he was adding decades of costs without counting the growth on the money not yet spent.
It is still a large number and still short of what he has. But it is now a gap with a size, which can be closed with a combination of savings, cover and time — rather than a total that simply ended the conversation.
What to do next
Care Cost Planning lets you set the return, the inflation rate and the horizon yourself, and shows how long the money lasts as you move them. Start from a cost figure you trust, then change one assumption at a time to see which one your plan is most exposed to.
It is a thinking tool, not a form. Nothing is saved and there is no sign-in.
Related planning areas
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How much will my child need after I am gone?
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Will my savings be enough?
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Financial Planning
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Legal Planning
Important
This page explains how families think about the arithmetic of lifetime care. It is not financial, investment, insurance or tax advice, and LegacyNest does not recommend products, schemes, allocations or providers. A projection is a consequence of the assumptions you give it, not a forecast of what will happen. Talk to a qualified financial adviser before acting on any figure you produce here.