How Much of Your Savings Will You Lose to Care Home Fees?
If you have more than £23,250 in savings and assets, you'll pay all of your care home fees yourself until your money drops below that line. If you have less than £14,250, the council pays for your care and your savings are left alone. Between those two numbers, you make a small weekly contribution.
Last updated: April 2026
This guide explains exactly what that means for your money, with a calculator to show you what you'd actually pay, and answers to the questions families ask most.
The Three Thresholds You Need to Know
In England, every council uses the same financial rules when someone goes into a care home. There are three bands:
Above £23,250 — you pay for everything
This is the upper capital limit. If your savings, investments, and included assets add up to more than this, you're classed as a "self-funder." The council won't help with your fees, and you'll pay the care home's full rate — usually £1,000 to £1,800 per week depending on where you live.
Between £14,250 and £23,250 — you contribute a small amount
This is the tariff band. You don't pay the full fees, but you contribute £1 per week for every £250 you have above £14,250. The council pays the rest.
Below £14,250 — the council pays
This is the lower capital limit. Your savings are ignored entirely. The council covers your care, and you only contribute a portion of your income (pension, benefits) towards the fees.
The thresholds haven't changed in over a decade and aren't adjusted for inflation. That's why more and more families find themselves tipped into the self-funder category over time.
Work Out What You'd Pay
Use the calculator below to see roughly what you'd contribute each week, based on your own savings and income.
Your home is NOT included if your spouse, a relative over 60, or a dependent child still lives there.
This is an estimate based on England's 2025/26 rules. Wales, Scotland, and Northern Ireland have different thresholds. It's not financial advice — request a financial assessment from your council for your exact figures.
Worked Examples
Three realistic scenarios to show how the numbers play out.
Margaret, 84 — £60,000 in savings, pension £220/week
Margaret is above the upper capital limit, so she's a self-funder. At an average care home fee of £1,200 per week, her savings will cover about 22 months before she drops below £23,250 and the council steps in. After that, her pension continues to contribute, but her capital is protected from that point on.
John, 78 — £18,000 in savings, state pension £180/week
John falls into the tariff band. His £18,000 is £3,750 above the lower limit, which means a tariff income of £15 per week (£3,750 ÷ £250). He contributes £15 plus his pension minus the Personal Expenses Allowance (£32.65/week), so around £162 per week. The council covers the rest of his care.
Dorothy, 91 — £8,000 in savings, pension £185/week
Dorothy is below the lower capital limit. Her savings are ignored completely. She contributes her pension minus the Personal Expenses Allowance, so about £152 per week. The council pays the full balance of her fees.
What Counts as Savings and What Doesn't
This is where things get more complex. "Savings" in the financial assessment doesn't just mean money in a current account.
What's counted:
- Cash savings (current accounts, savings accounts, Premium Bonds)
- Investments (stocks, shares, ISAs, unit trusts)
- Property you own but don't live in
- Business assets
- Trust funds, in most cases
- National Savings certificates and bonds
What's not counted:
- The value of personal possessions (furniture, clothing, jewellery for personal use)
- Life insurance policies that haven't matured
- Pre-paid funeral plans
- Some compensation awards
- The surrender value of annuities
Income is separate:
Your pension, benefits, and other regular income are assessed separately from your capital. Most of your income goes towards your fees, but you keep the Personal Expenses Allowance (currently £32.65 per week) for your own use — for things like clothes, toiletries, or phone bills.
What About the House?
For most families this is the big question. The answer depends on who else lives there.
Your home is NOT counted if:
- Your spouse, civil partner, or unmarried partner still lives there
- A relative over 60 lives there
- A relative under 60 who is incapacitated lives there
- A dependent child under 16 lives there
In these cases, the house is disregarded from the financial assessment entirely, no matter what it's worth.
Your home IS counted if none of the above apply.
If the house is included and pushes you over £23,250, you don't have to sell it immediately. You can apply for a Deferred Payment Agreement, where the council pays your fees and recovers them when the house is eventually sold.
What About My Spouse or Partner?
This trips a lot of families up. Your spouse's income and savings are not assessed. Only the person going into care is means-tested.
That said, jointly-held accounts are usually split 50/50 for the purposes of the test — so if you have £40,000 in a joint account, £20,000 counts as yours. The same applies to jointly-owned investments.
Speak to a financial adviser if you're unsure. Age UK's advice line is free: 0800 678 1602.
What the Council Can't Touch
Whatever your means assessment says, the council has to leave you with:
- Personal Expenses Allowance — £32.65 per week for your own use
- Any benefits that don't count as income — for example, the mobility component of Personal Independence Payment
- Assets that aren't counted — see the list above
If you're a self-funder, you can also claim Attendance Allowance — up to £108.55 per week — to help with care costs. It's not means-tested and many families don't claim it.
A Word of Warning About Giving Money Away
If the council thinks you've deliberately given away savings or property to qualify for help, they can treat you as still having that money. This is called deprivation of assets.
It applies to things like:
- Gifting large sums to family after a care diagnosis
- Selling the house to a relative for below market value
- Spending unusually large amounts in a short period
- Transferring assets into a trust shortly before needing care
There's no fixed time limit on how far back councils can look. It comes down to what the council believes your intent was. Normal spending, reasonable gifts, and long-standing financial arrangements are fine. Moving money around to dodge the assessment is not.
If you're thinking about financial planning around care costs, take proper legal or financial advice first. Getting it wrong is expensive.
Frequently Asked Questions
How much savings can I keep before the council helps with care home fees?
In England, the council will start to help with care home fees once your savings and included assets drop below £23,250. Below £14,250, the council pays in full and your savings are ignored entirely.
Will I have to use all my savings to pay for a care home?
Only down to the £14,250 threshold. Below that, your savings are protected and the council takes over funding. You'll still contribute from your pension and benefits, but your capital is left alone.
Can my partner's savings be used to pay for my care?
No. Only the person going into care is means-tested. However, jointly-owned savings and assets are usually split 50/50 for the assessment.
Do I have to sell my house to pay for care?
Not always. Your home is not counted in the assessment if your spouse, a relative over 60, or a dependent child still lives there. If it is counted, you can use a Deferred Payment Agreement to avoid selling immediately.
What happens when my savings run out?
When your total capital drops below £23,250, the council will start contributing. When it drops below £14,250, the council pays the fees in full (minus your income contribution). You cannot be evicted from your care home when this happens — the council must continue to fund your placement.
What is the Personal Expenses Allowance?
It's an amount the council must leave you from your income, currently £32.65 per week in England. It's for personal spending — clothes, toiletries, haircuts, small gifts — and isn't used towards care fees.
Can I give my savings to my children to avoid care fees?
No, and trying to will likely be classed as deprivation of assets. The council can still treat you as if you had the money, and you'd end up paying the fees anyway. Always take proper financial or legal advice before making any large transfers.
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Find care homes near youThis guide is based on England's 2025/26 rules. Figures are accurate as of April 2026 but may change in future tax years. For your specific situation, request a free financial assessment from your local council's adult social services team.
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