Care home financial assessments: what to expect

If someone needs to move into a care home, the local council will carry out a financial assessment (means test) to determine how much they will contribute towards care costs. Understanding this process can help you prepare and avoid surprises.

What is a financial assessment?

A financial assessment is carried out by the local council after a Care Needs Assessment has determined that care home care is required. It looks at the person's savings, investments, property, and income to work out how much they can afford to contribute.

The capital thresholds (2024/25)

• Above £23,250: You are expected to fund your own care in full (self-funder)
• Between £14,250 and £23,250: You contribute partially — a notional income is assessed from the “tariff” capital
• Below £14,250: The council funds care minus a contribution from income (e.g. pension)

What counts as capital?

• Savings and bank accounts
• Investments and ISAs
• The value of your property (in most cases — see below)
• Deprivation of assets: if assets have been transferred or given away to avoid care costs, the council may still include them

Is a property always included?

Not always. A property is excluded from the financial assessment if any of the following people still live in it:

• A spouse or civil partner
• A dependent child under 18
• A relative aged 60 or over
• A relative who is disabled
• A carer who gave up their home to care for the person

If none of these apply, the council will include the property's value after 12 weeks (the “12-week property disregard”). During those 12 weeks, the council funds care at its rate while options for the property are explored.

Income is always assessed

Regardless of capital, income is always assessed — including the State Pension, private pensions, benefits, rental income and Attendance Allowance. The person must be left with a “personal expenses allowance” of at least £30.15/week (2024/25) for personal spending.

How to prepare

• Gather 3 months of bank statements for all accounts
• Have property valuations and mortgage statements ready
• Note all regular income sources
• Keep records of any large financial gifts made in the past — the council may ask
• Consider seeking independent financial advice from a specialist care fees adviser