Pillar Guide · Updated July 2026
UK Care Costs Means Test: A Complete Guide for 2026/27
Working out who pays for social care in England is one of the most consequential and least understood financial assessments a family will face. This guide explains the £23,250 and £14,250 capital thresholds for 2026/27, when your home is disregarded from the assessment, the mandatory 12-week property disregard, deferred payment agreements, how income and the Personal Expenses Allowance are treated, deliberate deprivation of assets, the separate NHS Continuing Healthcare route, and how the rules differ across Scotland, Wales and Northern Ireland.
What Is the Means Test
When an adult is assessed by their local authority as needing social care — whether help at home, day care, or a residential or nursing care home place — the council carries out a means test under the Care Act 2014 (in England) to determine what, if anything, the person must contribute towards the cost. The assessment looks separately at capital (savings, investments and, in some circumstances, property) and income (pensions and certain benefits), applying nationally set thresholds and rules to arrive at a weekly contribution.
This is entirely separate from NHS-funded healthcare, which remains free at the point of use. Social care means testing exists because social care, unlike NHS treatment, has never been free in England regardless of means — a distinction that regularly causes confusion and can result in families spending very large sums on care fees before qualifying for council support.
Capital Limits 2026/27
Two capital thresholds govern the assessment in England. Above the upper capital limit of £23,250, you are generally treated as a self-funder and must pay for your own care in full, though the council must still carry out a needs assessment and can arrange care on your behalf if you ask (sometimes at a cost disadvantage compared to arranging it privately, because councils negotiate different rates with providers).
Between £14,250 and £23,250, you receive some means-tested support but must also contribute from your capital through “tariff income” — assumed at £1 per week for every £250, or part of £250, of capital held between the two limits. Below £14,250, your capital is disregarded entirely for the purposes of calculating your contribution, though your income is still fully assessed.
These thresholds have been frozen for many years. A long-promised reform to raise the upper capital limit substantially (to £100,000) and introduce an £86,000 lifetime cap on personal care costs was legislated for under the Health and Social Care Levy Act 2021 but has been repeatedly delayed by successive governments and, as of 2026/27, has still not been implemented — families should not plan around it being in force imminently.
The Property Disregard
Your main home is never counted as capital if you are receiving care at home (domiciliary care) — only residential and nursing care assessments consider property value at all. For residential care, the property is permanently disregarded if certain people continue to live there: your spouse or civil partner; an estranged or divorced partner who is the lone parent of a child you are liable to maintain; a relative aged 60 or over; or a relative of any age who is incapacitated.
Councils also have discretion to disregard the property in other compelling circumstances, though this is applied inconsistently between local authorities. If no qualifying disregard applies, the property is normally included in the capital assessment after the mandatory minimum period described below.
The 12-Week Property Disregard
Where a person moves permanently into residential care and their property is not otherwise disregarded, the council must ignore the property’s value for at least the first 12 weeks of the placement. During this window the person is assessed and charged as though they only held their non-property capital, giving time to decide whether to sell, rent out the property, or set up a deferred payment agreement.
After the 12 weeks, if the property remains unsold and is not disregarded on any other ground, its value is normally included in the capital assessment, typically pushing the person above the upper capital limit and into self-funder status unless a deferred payment agreement is arranged.
Deferred Payment Agreements
A deferred payment agreement (DPA) allows a person to delay paying their council for residential care fees, using the value of their home as security through a legal charge, rather than being forced to sell it immediately. The council pays towards your care costs (or continues to charge them to the DPA) and recovers the amount later — typically when the property is eventually sold, or from the estate after death.
Interest is charged on the deferred balance from 56 days after the agreement starts, at a rate set nationally and linked to gilt yields (reviewed twice a year), alongside an administration or legal set-up fee charged by the council. Under the Care Act 2014, councils must offer a DPA to anyone who meets the qualifying criteria — broadly, sufficient equity in the property and no other reasonable means of paying — though they retain some discretion to refuse if the available equity is insufficient to cover likely costs over a reasonable period.
A DPA is a loan, not a write-off — the debt (plus accrued interest) must eventually be repaid, usually from the sale proceeds of the property or the estate. Families should weigh a DPA against alternatives such as renting out the property to generate income to pay fees directly, particularly where a long stay in care is anticipated and interest could accumulate substantially.
Income Assessment and Personal Expenses Allowance
For someone in residential care, most income — State Pension, workplace and private pensions, and most benefits — is expected to go towards care fees. The council must leave the person a minimum weekly amount for personal spending, the Personal Expenses Allowance, set at £30.65 per week for 2026/27 in England, intended to cover items like toiletries, clothing, and small personal purchases not covered by the care package.
Disability benefits such as Attendance Allowance or the care component of Personal Independence Payment or Disability Living Allowance are usually stopped after four weeks of council-funded residential care, since they exist to help meet care costs the council is now funding — but these benefits continue in full for someone receiving care at home, since domiciliary care support does not replace the purpose of these disability benefits in the same way.
Spouses, Partners and Joint Assets
Only the capital of the person needing care is assessed — a spouse or civil partner’s separate savings and investments are not counted, even though the couple may live as a single household. Jointly held savings or investments are generally assumed to be split equally (50/50) between the couple unless there is clear evidence of a different beneficial ownership split.
This principle protects the financial position of a spouse remaining at home while their partner is in care, but couples considering restructuring how assets are held purely to reduce the assessed person’s capital should take specialist advice first, since transactions carried out with the primary intention of avoiding care costs can be challenged as deliberate deprivation of assets.
Deliberate Deprivation of Assets
If a local authority concludes that someone has deliberately given away or spent money with the specific intention of reducing their capital to qualify for more council funding, it can treat that person as still holding the asset for assessment purposes — known as “notional capital”. There is no fixed rule such as a “seven-year” safe period as sometimes exists for inheritance tax; councils assess intent, timing and circumstances on a case-by-case basis.
Gifts made many years before any care need could reasonably have been foreseen are far less likely to be challenged than a large gift made shortly after a diagnosis or a formal care needs assessment. If a council determines deliberate deprivation has occurred, it can pursue the recipient of the gift directly for a contribution towards care costs in some circumstances, under specific Care Act provisions.
NHS Continuing Healthcare
NHS Continuing Healthcare (CHC) is a wholly separate, non-means-tested funding route available where a person’s primary need is assessed as being health-related rather than purely social care. Eligibility is assessed using a national Decision Support Tool covering domains such as mobility, nutrition, continence, behaviour and medication needs, typically following an initial screening checklist.
If assessed as fully eligible, the NHS funds all care costs — regardless of savings or income — with no means test applied at all. CHC assessments have a reputation for being strict and initial rejection rates are high; families who believe an assessment was conducted incorrectly, or that relevant evidence was not properly considered, can request a formal review and, if unresolved, escalate to an Independent Review Panel.
Scotland, Wales and Northern Ireland
Scotland provides free personal care for all adults assessed as needing it, regardless of means, since the extension of Frank’s Law in 2019 — though accommodation (“hotel”) costs in a care home are still means-tested separately. This is a materially more generous system than England’s for the personal care element.
Wales operates its own capital limits, set considerably higher than England’s for residential care assessments, and caps the maximum weekly charge that can be levied for care received at home, regardless of the actual cost of the care package. Northern Ireland runs a further separate charging framework. Anyone advising a relative, or moving between UK nations, should check the specific current rules of the relevant nation directly rather than assuming the England figures in this guide apply.