Care fees: what the means test actually looks at

Last reviewed: August 2026

Most people planning for later life have heard that there is a cap on care costs coming. There is not. The reform announced in 2021, which would have introduced an £86,000 lifetime cap and raised the savings threshold to £100,000, was cancelled in July 2024 and is not in the current legislative programme.

So it is worth understanding the rules that actually apply, because a good number of people are planning around ones that do not exist.

The thresholds

In England, the means test works off two figures. They have not changed since 2010 and were confirmed again for 2026/27.

Upper capital limit: £23,250. Above this you are a self-funder and pay the full cost of your care.

Lower capital limit: £14,250. Below this your capital is disregarded entirely, and you contribute only from your income.

Between the two, you pay what is called tariff income: £1 a week for every £250 of capital above the lower limit.

The rest of the UK differs. Scotland uses £35,000 and £21,500. Wales has a single limit of £50,000, the most generous in the UK. Worth knowing if you have family elsewhere.

What counts as capital

Savings, investments, and in many cases the value of your home.

The home is where most of the anxiety sits, so it is worth being precise about when it counts and when it does not.

Your home is disregarded entirely if any of these people still live there: your spouse or partner, a relative aged 60 or over, a relative who is incapacitated, or a child of yours under 18.

It is disregarded for the first 12 weeks of permanent residential care in any event.

After that, if none of those people live there, its value is usually assessable. That does not mean you have to sell it. A deferred payment agreement lets the local authority pay your fees and place a charge on the property, repaid when it is eventually sold. Interest applies, set by the Department of Health and Social Care.

What care actually costs

Residential care in England typically runs between £1,000 and £1,400 a week, with nursing care higher, and considerable regional variation. At those rates, capital above the upper threshold can be used up within two or three years.

That arithmetic is the reason this matters. It is not usually a question of whether the money runs down, but how fast.

The entitlement most people miss

If your primary need is a health need rather than a social care need, you may qualify for NHS Continuing Healthcare. If awarded, the NHS pays the full cost of your care regardless of your capital.

Around 60,000 people in England receive it at any one time, which is a small number relative to how many might qualify. Advanced dementia with complex medical needs, advanced Parkinson’s and some post-stroke care are the sort of circumstances worth testing. Applying costs nothing, and it is worth pursuing actively rather than waiting to be offered it.

What you cannot do

This is the part we would rather say plainly.

Giving your house to your children to keep it out of the means test rarely works. Local authorities apply what is called deliberate deprivation of assets. If they decide you disposed of something in order to reduce your care contribution, they can assess you as though you still owned it. There is no time limit on how far back they can look.

Schemes marketed specifically as protecting your home from care fees deserve real scepticism. Some involve trusts that create tax problems of their own, and some are sold by firms that are not regulated at all.

What can be done legitimately is more modest, and depends on your circumstances: how assets are owned between spouses, what happens on first death, and making sure the assessment itself is done correctly.

Where advice helps

Honestly, sometimes it does not. If your capital is well below the threshold, the means test will look after you and there is little to plan.

It matters when there is a house involved, when one of a couple needs care and the other does not, when there is a business or a farm, or when someone has already been assessed and you think the assessment is wrong.

You may also find our articles on lasting power of attorney and the April 2027 pension changes useful, since the three questions tend to arrive together.

Talk it through with one of us

The first conversation is free and there is no obligation. Book with whichever adviser is closest to you, or whoever suits. We work with clients across the UK.

Lee Barton (Leicester) | Ian Laker (Tamworth) | Chris Wood (Coventry)

This article is for general information and does not constitute personal advice. Figures apply to England for the 2026/27 tax year and differ elsewhere in the UK. The Financial Conduct Authority does not regulate advice on long-term care funding, trusts or will writing. Tax and benefit rules depend on individual circumstances and may change.