In England, the care home fees rules for 2026 are broadly unchanged: you pay the full cost of a care home while your assessable capital is above £23,250, and your local council begins to help once it falls below that figure (gov.uk charging circular 2025 to 2026, subject to change).
The widely reported £86,000 cap on lifetime care costs, which had been planned for October 2025, was cancelled in July 2024 and does not apply in 2026, so there is currently no upper limit on what a self-funder can pay (HM Treasury statement, 29 July 2024, subject to change). This guide explains the rules that do apply, for England and Wales, as general information rather than advice for any one person.
Who pays for a care home in 2026?
Whether the state helps with residential care depends on two things: an assessment of your care needs, carried out by your local council, and a separate financial assessment, often called the means test. If you are assessed as needing residential care, the council then looks at your income and capital to work out how much, if anything, it will contribute (gov.uk, needs assessment, as at August 2026, subject to change).
People fall broadly into three groups: self-funders, who meet the full cost themselves; part-funded residents, who pay a contribution while the council pays the rest; and fully council-supported residents. The group you fall into is set mainly by your capital, measured against the limits below.
The capital limits for 2026
Capital means savings, investments and, in many cases, the value of property. In England the two capital limits have been held at the same level for several years and remain unchanged for the 2025 to 2026 financial year (gov.uk charging circular 2025 to 2026, subject to change).
| Your assessable capital | What the rules say (England) |
|---|---|
| Above £23,250 (upper limit) | You pay the full cost of your care as a self-funder. |
| Between £14,250 and £23,250 | You contribute from income, plus a tariff income of £1 per week for every £250 of capital in this band. |
| Below £14,250 (lower limit) | Your capital is left out of the calculation. You contribute from income only. |
Source: gov.uk charging circular 2025 to 2026. Figures for the 2025 to 2026 financial year, subject to change.
How the means test works
Once you are supported by the council, most of your income, including pensions and many benefits, goes towards the fees. You are, however, left with a Personal Expenses Allowance to spend on things that are not part of your care. For 2025 to 2026 that allowance is £30.65 a week in England (gov.uk charging circular 2025 to 2026, subject to change).
A common point of confusion is that reaching the lower capital limit does not make care free. It means capital stops being counted, but income is still assessed. Where a resident wants a room that costs more than the council will pay, a third party such as a family member may need to pay a top-up fee to cover the difference (gov.uk, Care and Support Statutory Guidance, as at August 2026, subject to change).
Your home and the fees
The value of your home is usually included in the means test if you move into a care home permanently, but there are important exceptions. The home is disregarded if a qualifying relative still lives there, for example a spouse or civil partner, a relative aged 60 or over, or a dependent child (gov.uk, Care and Support Statutory Guidance, as at August 2026, subject to change).
Two schemes can help where the home would otherwise have to be sold quickly:
| Scheme | What it does |
|---|---|
| 12-week property disregard | The value of your home is ignored for the first 12 weeks of a permanent stay, giving time to decide what to do with it. |
| Deferred Payment Agreement | The council pays some fees now and recovers them later, usually from the property when it is eventually sold. |
Source: gov.uk, Care and Support Statutory Guidance, as at August 2026, subject to change.
When care is free: NHS funding
Some care is funded by the NHS rather than means tested. If your needs are primarily health related, you may qualify for NHS Continuing Healthcare, which covers the full cost of a care home place and is not means tested (NHS, Continuing Healthcare, as at August 2026, subject to change). If you do not qualify but need nursing care, the NHS pays a contribution towards it, known as NHS-funded Nursing Care, set at £267.68 a week from 1 April 2026 (NHS, NHS-funded Nursing Care, subject to change).
The rules are different in Wales
Care charging is devolved, so Wales sets its own limits. Instead of two capital thresholds, Wales uses a single capital limit of £50,000 for residential care in 2025 to 2026. If your capital is at or below £50,000, the council helps with the cost and you contribute from income; above it, you pay the full fee (gov.wales, charging for social care, as at August 2026, subject to change). Scotland and Northern Ireland operate different systems again, so the England figures above do not apply there.
Planning for the impact of care fees
Because there is no cap on lifetime costs in 2026, many families look at planning for, limiting or mitigating the impact of care fees well before care is needed. That can involve making sure a valid will and a lasting power of attorney are in place, understanding how the family home is owned, and considering how care costs sit alongside inheritance tax and the wider estate.
One rule to be aware of is deliberate deprivation of assets. If a council decides that assets were given away mainly to avoid care fees, it can assess you as though you still owned them (gov.uk, Care and Support Statutory Guidance, as at August 2026, subject to change). Because the rules are detailed and the outcome depends on individual circumstances, this is an area where many people take advice from a suitably qualified professional. You can read our wider guidance on care fees planning and how it fits within estate planning, or arrange a consultation.
- Upper capital limit: £23,250. Lower capital limit: £14,250 (gov.uk, 2025 to 2026, subject to change).
- Tariff income between the limits: £1 a week per £250 of capital (gov.uk, subject to change).
- Personal Expenses Allowance: £30.65 a week (gov.uk, 2025 to 2026, subject to change).
- No cap on lifetime care costs; the planned £86,000 cap was cancelled (HM Treasury, 29 July 2024, subject to change).
- Wales uses a single £50,000 capital limit (gov.wales, subject to change).
Frequently asked questions
What are the care home fees rules for 2026?
In England, you pay the full cost of a care home while your assessable capital is above £23,250, and the council begins to help once it falls below that figure, with capital fully disregarded below £14,250 (gov.uk, 2025 to 2026, subject to change). The rules are separate in Wales, Scotland and Northern Ireland.
How much money can you keep before paying for care?
In England, capital above £23,250 means you meet the full cost yourself, and capital below £14,250 is left out of the assessment, though income is still counted (gov.uk, 2025 to 2026, subject to change). In Wales the single capital limit is £50,000 (gov.wales, subject to change).
Is there a cap on care costs in 2026?
No. The £86,000 cap on lifetime personal care costs that had been planned for October 2025 was cancelled in July 2024 and does not apply in 2026, so there is currently no upper limit on total care costs (HM Treasury, 29 July 2024, subject to change).
Do you have to sell your home to pay for care?
Not always. Your home is disregarded if a qualifying relative such as a spouse still lives there, and the value is ignored for the first 12 weeks of a permanent stay. A Deferred Payment Agreement can also let the council recover fees later rather than from an immediate sale (gov.uk, Care and Support Statutory Guidance, as at August 2026, subject to change).
Can care ever be free?
Yes, in some cases. NHS Continuing Healthcare covers the full cost of care for people whose needs are primarily health related, and it is not means tested (NHS, as at August 2026, subject to change). Where someone needs nursing but does not qualify, the NHS pays a nursing care contribution of £267.68 a week from 1 April 2026 (NHS, subject to change).
Can you give away assets to avoid care fees?
This carries real risk. If a council concludes that assets were given away mainly to reduce care fees, it can treat you as still owning them under the deliberate deprivation of assets rules (gov.uk, Care and Support Statutory Guidance, as at August 2026, subject to change). The outcome depends on individual circumstances, which is why many people take professional advice before acting.