Introduction
If you have received a personal injury settlement, or one is on its way, there is a piece of planning that needs doing quickly. Compensation is meant to pay for your care, your equipment, your adapted home and your lost earnings, sometimes for the rest of your life. It is not meant to disqualify you from the help you were already receiving.
A Personal Injury Trust ring-fences the money so that it is disregarded when your entitlement to means-tested benefits is worked out, and when a local authority assesses what you should pay towards care. Set up properly, it lets you use your compensation for what it was awarded for.
Why Compensation Needs Protecting
Means-tested support looks at your capital. Once savings held in your own name pass £6,000 your entitlement can start to reduce, and at £16,000 or more it usually stops altogether. A settlement of any real size takes you past both figures on the day it arrives.
The effect can be brutally unfair. Money awarded to cover a lifetime of extra costs is counted as though it were ordinary savings, so people lose Universal Credit, Housing Benefit or council care funding and then spend the award simply replacing what they have lost. Within a few years the compensation is gone and the injury is not.
A Personal Injury Trust is designed to prevent that outcome. Because the compensation is held by trustees rather than by you personally, it should be disregarded in the assessment, so your entitlement is worked out as it was before the money arrived. That depends on the trust being set up correctly and in time.
The 52 Week Window, and Why Timing Matters
There is a limited grace period. A 52 week disregard runs from the date of your first compensation payment, including an interim payment, during which the money is ignored for means-tested purposes. Once those 52 weeks are up, anything you still hold personally counts as capital in the ordinary way.
That window is the time to act. A trust created inside it is designed to keep the protection running without a gap in your entitlement, which is far simpler than explaining a gap afterwards.
It matters because benefits lost before a trust is set up cannot be reclaimed. There is no backdating, no correcting it later and no discretion to be asked for. If you are told an interim payment is coming, that is the moment to speak to us, not after the final settlement has been banked.
How a Personal Injury Trust Works
Most personal injury trusts are bare trusts, which is the simplest form. You remain the only beneficiary, entitled to the whole fund, and the trustees hold it for you. Nothing is given away and nobody else acquires an interest in your money.
You choose the trustees. Usually that is you together with one other person you trust completely, often a spouse, an adult child or a close friend. Two signatures are needed for payments out, which is a safeguard rather than an obstacle, and decisions about how the money is used remain yours. Trustees must keep the fund separate and keep records, and we explain what that involves.
In day to day terms it feels like a separate bank account with a second signatory. The fund pays for your care, therapies, equipment, adaptations to the house, a suitable vehicle, help around the home or a holiday, exactly as you decide.
Care Funding and the 2026 High Court Decision
Protection is not limited to benefits. When a local authority assesses your finances for adult social care, compensation held in a Personal Injury Trust falls to be disregarded too.
In 2026 the High Court confirmed the point in R (CGT) v West Sussex County Council [2026] EWHC 293 (Admin), holding that personal injury trust funds must be fully disregarded in Care Act assessments. For anyone who has been told otherwise by a council, that decision is worth knowing about.
The protection still depends on the trust being properly constituted and properly run, which is where careful drafting earns its keep.
Only Compensation Money Goes In
One rule matters more than any other. A Personal Injury Trust should hold your compensation and nothing else. Paying in wages, an inheritance, savings or the proceeds of a house sale risks the protection for the whole fund, because the trust is no longer purely a personal injury fund.
If you want to protect other money as well, the answer is a separate arrangement rather than a bigger pot. We look at everything you hold and tell you what belongs where, including how interest earned inside the trust is treated.
Receiving an Inheritance, and Other Windfalls
An inheritance raises similar questions. Money left to you outright becomes your capital the moment the estate is distributed, which can affect means-tested benefits or care funding just as compensation does, and it can expose the funds to a future divorce or bankruptcy.
There are often options if you act early enough. Depending on the timing, an inheritance may be redirected into a trust, sometimes by a deed of variation, so it is held for your benefit rather than owned outright. A personal injury award needs its own trust, but the thinking is the same.
If you are expecting an inheritance and you receive means-tested support, ring us before the money reaches your account.
Our Personal Injury Trust Service
We keep the process quick, because timing is usually the pressing issue:
- A free initial conversation, including with your solicitor or case manager if that helps.
- Clear advice on whether a trust is needed in your circumstances, and by when.
- Drafting the trust deed, normally as a bare trust, with trustees you have chosen.
- Practical help opening the trust bank account and getting the funds paid in correctly.
- A plain language guide for your trustees on what they can and cannot do.
- Notifying the DWP and the local authority so your entitlement is assessed correctly.
- A review whenever your circumstances change, and support if a decision needs challenging.
We also work with a local solicitor and are able to cover any and all of your requirements, so if your case needs legal input alongside the trust, that is covered.
If a settlement is coming, call us on 0800 048 7320 and we will tell you honestly whether you need a trust.
Frequently Asked Questions
What is a Personal Injury Trust?
Will a Personal Injury Trust protect my benefits?
Does a Personal Injury Trust protect me from care fees?
Working alongside a local solicitor
We work with a local solicitor and are able to cover any and all of your requirements. If in doubt, call us on 0800 048 7320 and ask, or use the contact form on our home page.
Related Services
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Safeguard your assets, provide for your loved ones, and prevent potential complications through customized trust arrangements tailored specifically to your family's circumstances.
Learn MoreVulnerable Persons Trusts
Provide for a disabled or vulnerable loved one in a way designed to protect their means-tested benefits and care funding, with trustees who know them well.
Learn MoreDiscretionary Trusts
Trustees you choose decide how and when each beneficiary benefits, guided by your letter of wishes, so the arrangement can adapt as your family changes.
Learn MoreIs a settlement on its way?
Timing matters with a Personal Injury Trust. Call us and we will tell you honestly whether you need one.
