Care fees explained: who pays what
Care in England is means-tested. Above £23,250 of assessable capital you pay in full. Here is what counts, what does not, and what the NHS covers.
The short answer
- Above £23,250 of assessable capital you normally pay your own care fees in full.
- Below £14,250 your capital is ignored — but your income is still assessed.
- In between, the council assumes £1 a week of "tariff income" for every £250 of capital.
- Your home is ignored while a partner, a relative over 60, an incapacitated relative or a child under 18 lives there — and for the first 12 weeks of a permanent placement.
- If your needs are primarily health needs, NHS Continuing Healthcare covers the full cost. Always get assessed before paying.
What's on this page
How the means test works#
When you need care, the council carries out two assessments: a needs assessment (what care you require) and a financial assessment (what you must contribute). The financial one looks at capital and income.
| Assessable capital | What happens |
|---|---|
| Above £23,250 | You pay the full cost as a self-funder. |
| £14,250 to £23,250 | The council contributes, but assumes £1 a week of income for each £250 of capital in this band. |
| Below £14,250 | Capital is ignored entirely. Income is still assessed. |
What counts as capital#
- Savings, current accounts, ISAs, premium bonds;
- Stocks, shares and investment bonds;
- Second properties and land;
- Your home, unless it is disregarded (below).
What does not#
- Personal possessions — furniture, jewellery, a car — unless bought to reduce your assessed capital;
- The surrender value of most life insurance policies;
- Certain compensation payments held in trust.
When your home is disregarded#
Your home is left out of the assessment while any of these live there:
- your husband, wife, civil partner or unmarried partner;
- a relative aged 60 or over;
- a relative who is incapacitated;
- a child of yours under 18;
- in some cases, an estranged or divorced former partner who is a lone parent.
It is also disregarded for the first 12 weeks of a permanent placement. Councils have discretion to disregard it in other circumstances — for example where a long-term carer lives there — so it is always worth asking.
Income and the personal expenses allowance#
Pensions, most benefits and annuity income are assessed. Whatever your income, you keep a personal expenses allowance each week for personal spending — the council cannot take that. Check the current amount with your local authority, as it is uprated periodically.
What the NHS pays for#
NHS Continuing Healthcare covers the entire cost of care — including accommodation — where your needs are primarily health needs rather than social care needs. It is not means-tested. Assessment is via a checklist, then a full multidisciplinary assessment. Many families never ask, and a great many eligible people pay for years unnecessarily. If you are refused, you can appeal.
NHS-funded nursing care is a separate weekly contribution towards the nursing element in a nursing home, for people who do not qualify for full Continuing Healthcare.
Attendance Allowance is not means-tested and is paid to people over State Pension age who need help with personal care. It is frequently unclaimed.
Deferred payment agreements#
If your home does become assessable and you would otherwise have to sell it quickly, a deferred payment agreement lets the council secure the fees against the property. It is repaid from the eventual sale, usually after death. It does not reduce the bill, but it prevents a forced sale and lets the family keep options open — including renting the property out.
What it actually costs#
Residential care in the UK commonly runs to four figures a week, with nursing care higher and wide regional variation. Treat any national average with caution and get real quotes from homes in your area — the difference between regions is enormous.
Can you protect anything?#
Legitimately, yes — mostly through a property protection trust in a couple's wills, which ring-fences the first partner's share of the home. What you cannot do is give assets away to avoid fees: see what works and what gets reversed.
What could your family actually keep?
Use the trust savings calculator to see the allowances that apply to your estate, and how much of your home could be protected. Two minutes, no sign-up.
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Frequently asked questions
Will the council take my house to pay for care?
Not while a partner, a relative over 60, an incapacitated relative or a child under 18 lives there, and not during the first 12 weeks of a permanent placement. Where the home is assessable, a deferred payment agreement can defer the cost against the property rather than forcing an immediate sale.
What is tariff income?
Between £14,250 and £23,250, the council assumes your capital generates income even if it does not — £1 a week for every £250. On £20,000 of capital that is about £23 a week of assumed income, which reduces the council's contribution accordingly.
Does my spouse's income count?
No. The financial assessment looks at the person needing care. Jointly held capital is normally treated as owned in equal shares. A spouse cannot be required to contribute from their own income, though they may be asked to make a voluntary contribution — you are entitled to decline.
Is care free in Scotland?
Scotland provides free personal and nursing care contributions, but accommodation costs are still means-tested and the thresholds differ. Wales and Northern Ireland have their own limits too. The figures on this page are England's.
What if I run out of money in a care home?
Once your capital falls to £23,250 the council should take over funding, subject to its usual rates. Tell them well in advance — three months is sensible — because if the home charges more than the council will pay, a third party top-up may be needed, or a move.
This is general information, not legal advice. Everyone's situation is different — speak to a qualified adviser before acting. KeepTheLot is an independent information service covering England & Wales. We are not a law firm.
Part of our guide to protecting your assets.