Who Pays Care Fees When Money Runs Out

Who pays when the savings run out?

Once assessed capital drops to the upper capital limit, responsibility for the fees shifts. The local council can begin funding care after a financial assessment, though the resident normally still contributes most of their income, keeping only a small personal expenses allowance (gov.uk, as at July 2026, subject to change). Care continues, and no one is asked to leave simply because their money has gone.

The capital limits, and what falls between them

England uses two thresholds. Above the upper capital limit, a person generally pays the full cost of care. Below the lower capital limit, their capital is left out of the calculation and they contribute only from income. Between the two, a tariff income is assumed on the capital in that band (gov.uk, charging circular 2026 to 2027, as at July 2026, subject to change).

Assessed capital (England)	Who generally pays (2026 to 2027)
Above £23,250 (upper limit)	Full cost paid by the resident
Between £14,250 and £23,250	Council may help; tariff income of £1 per week assumed for each £250 of capital in this band, plus income contribution
Below £14,250 (lower limit)	Capital ignored; resident contributes from income only

Assessed capital (England)

Who generally pays (2026 to 2027)

Above £23,250 (upper limit)

Full cost paid by the resident

Between £14,250 and £23,250

Council may help; tariff income of £1 per week assumed for each £250 of capital in this band, plus income contribution

Below £14,250 (lower limit)

Capital ignored; resident contributes from income only

Source: gov.uk, charging circular 2026 to 2027, as at July 2026, subject to change. These limits apply to England; Scotland, Wales and Northern Ireland set their own.

What the council counts as your money

The financial assessment, often called the means test, looks at both capital and income. Capital covers savings, most investments and, in many cases, the value of a home. From income, the resident keeps a personal expenses allowance and the rest goes towards the fees. For 2026 to 2027 that personal allowance is £31.80 per week (gov.uk, as at July 2026, subject to change).

The council cannot dip below the lower capital limit when assessing capital, so a resident is not left with nothing. Once capital reaches the upper limit, the assessment is repeated and the council can take over the balance of the fees, within the rate it would normally pay for a suitable placement (gov.uk, as at July 2026, subject to change).

For how the assessment is carried out, see the means test.

Does the home have to be sold?

Not always, and not immediately. When someone moves permanently into a care home, the value of their former home is disregarded for the first 12 weeks, which gives time to weigh up the options (nhs.uk, as at July 2026, subject to change). The home is left out of the assessment altogether for as long as certain people still live there, such as a spouse or partner, a relative aged 60 or over, or a dependent child.

Where the home is not disregarded, one route that many people consider is a deferred payment agreement with the council. Under this arrangement the council effectively lends against the value of the home so the fees can be paid without an immediate sale, with the debt repaid later, usually from the estate, and interest and administration charges may apply (nhs.uk, as at July 2026, subject to change). See our note on deferred payment agreements for how they work.

A worked example (illustration only). Assume a widower with no spouse or dependants living in his former home moves permanently into a care home with £60,000 in savings and pays his own fees. Over time his savings fall towards the upper capital limit of £23,250 (gov.uk, as at July 2026, subject to change). At that point he asks the council for a reassessment. Because his capital has reached the limit, the council can start contributing to the fees, while he pays most of his pension income towards the cost and keeps the £31.80 weekly personal expenses allowance (gov.uk, as at July 2026, subject to change). Change the assets, the income or who lives in the home and the outcome changes, so this is general information, not a calculation for any real case.

Can you give money away first to keep it from care fees?

This is where care fees planning has clear limits. A council can look back at gifts and transfers and, where it decides someone deliberately reduced their assets to avoid or reduce care charges, it can treat them as still holding that money as notional capital and charge accordingly (gov.uk, as at July 2026, subject to change). These deprivation of assets rules mean giving assets away specifically to sidestep care fees can be challenged, and in some cases the person who received the gift can be pursued.

None of this makes ordinary planning wrong, but it does mean that deliberately giving away assets to avoid care fees is not a reliable route, and it is not something this guide sets out to encourage. Many people instead focus on understanding the rules, keeping records of genuine reasons for any gifts, and considering how a will and wider plan fit together. Because the rules are strict and fact-sensitive, it can be worth discussing with a qualified professional, such as a solicitor or a specialist financial adviser, before acting. Our estate planning guide sets out the wider picture.

The position in Scotland and Northern Ireland

The figures above apply to England. Scotland runs its own system, including free personal and nursing care for those assessed as needing it, alongside separate capital limits, so the point at which the state helps with residential fees works differently. Wales and Northern Ireland each set their own charging rules and capital thresholds too. Because the numbers and the treatment of the home vary by nation, anyone with care needs in Scotland, Wales or Northern Ireland can check the rules that apply where they live, and it can be worth taking local advice.

Frequently asked questions

Who pays care home fees when your money runs out?

In England, once assessed capital falls to the upper capital limit of £23,250, the local council can start funding care home fees after a financial assessment (gov.uk, as at July 2026, subject to change). The resident usually still contributes most of their income. Care continues, and no one is asked to leave simply because their savings have gone.

Do you have to leave the care home if your savings run out?

Generally no. When capital reaches the upper capital limit, the council can take over funding within the rate it would normally pay for a suitable placement (gov.uk, as at July 2026, subject to change). If the current home costs more than that rate, a top-up from a third party may be needed to stay, depending on circumstances, so it can be worth discussing options early.

How much money can you keep before the council helps?

In England, capital above £23,250 generally means paying the full cost, and capital below £14,250 is left out of the assessment, with a tariff income assumed on amounts in between (gov.uk, as at July 2026, subject to change). From income, a resident keeps a personal expenses allowance of £31.80 per week. Scotland, Wales and Northern Ireland set their own limits.

Will the council take the house to pay for care?

The home is disregarded for the first 12 weeks of a permanent stay, and for longer where a spouse, partner, a relative aged 60 or over, or a dependent child still lives there (nhs.uk, as at July 2026, subject to change). Where it is counted, a deferred payment agreement may let fees be paid without an immediate sale, with the debt settled later, usually from the estate.

Is NHS care free when money runs out?

Some care is. NHS Continuing Healthcare is arranged and funded solely by the NHS for those whose needs are mainly health-related, and it is not means-tested, so savings and income are not assessed for it (nhs.uk, as at July 2026, subject to change). Eligibility depends on assessed needs rather than a diagnosis, so it can be worth asking for an assessment where health needs are significant.

Can giving money to my children stop it going on care fees?

It can be challenged. Where a council decides assets were given away deliberately to reduce care charges, it can treat the person as still holding that money as notional capital (gov.uk, as at July 2026, subject to change). Deliberately giving assets away to avoid care fees is not a reliable route, and it can be worth taking advice from a qualified professional before making significant gifts.

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the rules for England, and Scotland, Wales and Northern Ireland differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider an individual's own circumstances.

Who Pays Care Fees When the Money Runs Out?