Care Home Fees & Local Authority Means Test Calculator UK 2026/27

Planning for care home fees (residential care or nursing care) is a major financial issue for elderly UK residents and their families. Average UK residential care home fees range from £800 to £1,200 per week (£40,000 to £60,000 per year).

Local authorities conduct a statutory Financial Assessment (Means Test) under the Care Act 2014 to determine whether you qualify for council funding support or must pay 100% of care home fees as a self-funder.

⚙️ Statutory UK Care Home Capital Thresholds for 2026/27 (England)

1. Capital Assets Thresholds (Savings, Investments & Property)

• Upper Capital Limit (£23,250 in England):
  • If your total capital assets exceed £23,250, you are classed as a self-funder and MUST pay 100% of your care home fees out of your own funds.
• Between £14,250 and £23,250 (Partial Council Support):
  • If your capital is between £14,250 and £23,250, the local council contributes toward care fees, but assumes a ‘Tariff Income’ of £1.00 per week for every £250 of capital held between these two limits.
• Lower Capital Limit (£14,250 in England):
  • If your capital falls below £14,250, capital is ignored entirely, and the local council provides maximum financial support (you contribute only your weekly income minus the statutory Personal Expenses Allowance).

2. Personal Expenses Allowance (PEA)

• Even if a resident’s care home fees are funded by the local council, the resident is legally entitled to retain a statutory Personal Expenses Allowance (PEA) of £24.95 per week from their State/Private pension for personal pocket money (toiletries, clothing, stationery).

3. The 12-Week Property Disregard & Partner Rules

• 12-Week Property Disregard: When moving into a care home permanently, the value of your main home is IGNORED by the local council for the first 12 weeks of care.
• Partner Protection: If your spouse, civil partner, or dependent family member aged 60+ continues to live in your main home as their primary residence, the value of the property is PERMANENTLY DISREGARDED from the care home means test.

📊 Practical Care Home Means Test Worked Examples

Below are two worked calculation examples illustrating care home financial assessments:

📑 Common Pitfalls & Care Home Warnings

1. Deprivation of Assets Rule: Giving away money, transferring property to children, or buying expensive gifts specifically to drop capital below £23,250 to avoid care fees is classed as Intentional Deprivation of Assets. Local councils have legal powers to investigate asset transfers with no time limit and charge care fees as if you still owned the assets.
2. NHS Continuing Healthcare (CHC) Fully Funded Care: If a person’s primary need is a complex, unpredictable medical healthcare need (e.g. advanced dementia, severe stroke, terminal illness), they may qualify for 100% NHS Continuing Healthcare (CHC) funding. CHC is non-means-tested and pays 100% of care home costs regardless of wealth.
3. Third-Party Top-Up Fees: If a council-funded resident chooses a care home that charges more than the council’s standard funding rate, a family member must pay a Third-Party Top-Up Fee to cover the difference.

❓ Frequently Asked Questions (FAQ)