The care home fees means test
Before a council helps with care home fees it carries out a financial assessment, often called the means test. This guide explains how it works and what counts.
The means test is the local council's financial assessment of whether you qualify for help with care home fees. In England for 2025/26, if your capital is above the upper limit of 23,250 pounds you pay your own fees. Below that the council contributes, and below the lower limit of 14,250 pounds it helps the most while you still pay from your income. The council counts savings, investments and, in some cases, the value of your home, with several disregards.
At a glance
- Upper capital limit23,250 pounds (England, 2025/26)
- Lower capital limit14,250 pounds (England, 2025/26)
- Above upper limitYou pay your own fees
- Below lower limitCouncil helps most; you pay from income
- Counts as capitalSavings, investments, some property
- Who runs itYour local authority
What is the care home fees means test?
When you ask your local council for help with residential care fees, it first checks that you need care through a care needs assessment, then checks your finances through a financial assessment. That financial assessment is the means test. It decides how much, if anything, you contribute toward your fees and how much the council pays.
The figures in this guide are for England for 2025/26. Scotland, Wales and Northern Ireland run their own versions with different limits. This guide is for individuals and families, not for businesses.
The capital limits for 2025/26
England uses two capital thresholds, and they have been at the same level for several years. Capital means your savings, investments and certain assets. Where your home counts as capital, it is included too.
| Your capital | What happens |
|---|---|
| Above 23,250 pounds | You are a self-funder and pay your own fees in full |
| Between 14,250 and 23,250 pounds | The council helps; you also pay a tariff income from your capital |
| Below 14,250 pounds | The council helps the most; your capital is not counted, but you pay from income |
Between the two limits, the council treats part of your capital as if it produced an income, often described as a tariff income of about 1 pound a week for every 250 pounds of capital above the lower limit. That is added to your assessed contribution.
What counts as capital?
The council adds up your capital to compare it against the limits. Some things are counted in full, and some are disregarded. The treatment of your home is the part families most often ask about, and it depends on who still lives there.
- Counted: bank and building society savings, ISAs, stocks and shares, premium bonds, most second properties
- Counted in some cases: the value of your main home, unless a disregard applies
- Disregarded: the value of your home while a spouse, partner or certain relatives still live there
- Disregarded: personal possessions, and usually the surrender value of some life insurance policies
How your income is treated
The means test looks at income such as pensions as well as capital. Even when the council pays toward your fees, you are usually expected to contribute most of your income, keeping only a small weekly Personal Expenses Allowance for yourself. Some income is partly disregarded, and the rules are detailed, so the council will work the figure out for your situation.
Deliberately giving money away
Giving away savings or signing over your home to reduce a future care bill can be treated by the council as deliberate deprivation of assets. If the council decides you gave assets away mainly to avoid fees, it can assess you as though you still owned them. We cannot advise on this; speak to your local authority and, if needed, an FCA-authorised adviser or solicitor before acting.
The care home fees means test: common questions
What is the means test for care home fees?
It is the local council's financial assessment of whether you qualify for help with residential care fees. It compares your capital against the upper limit of 23,250 pounds and the lower limit of 14,250 pounds (England, 2025/26) and looks at your income to set your contribution.
How much can you have in savings before paying for care?
In England for 2025/26, above 23,250 pounds in capital you pay your own fees. Between 14,250 and 23,250 pounds the council helps but you pay a tariff income. Below 14,250 pounds your capital is not counted, though you still pay from your income.
What assets are exempt from care home fees?
Personal possessions are disregarded, and the value of your home is disregarded while a spouse, partner or certain other relatives still live there. Savings, investments and second properties are usually counted in full. Your council confirms the treatment for your case.
Does my income count in the means test?
Yes. Income such as pensions is assessed alongside capital. Even when the council pays toward your fees, you usually contribute most of your income, keeping a small weekly Personal Expenses Allowance. Some income is partly disregarded.
Can I give money away to avoid care fees?
Giving away assets to reduce a care bill can be treated as deliberate deprivation of assets, in which case the council can assess you as though you still owned them. Speak to your local authority and, if needed, an authorised adviser or solicitor before acting.
Need help with your own situation?
We can introduce you to an FCA-authorised care funding specialist who will look at your circumstances and the options.