Factsheet: Financial assessments for residential care
Summary
April 2026
This factsheet explains how we do a financial assessment if you are moving into a care home or nursing home.
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Introduction
Social care is not free and most people will pay towards their care. If you need to move into a residential care, we will do a financial assessment. This will help us work out how much you can afford to pay towards your care.
What is residential care?
‘Residential care’ includes care arranged in a care home or nursing home. You might go for a short break or respite, for a temporary stay, or decide to live there.
Do I have to tell you about my finances?
You can choose not to tell us about your finances, but you will have to pay the full cost of your care.
If you change your mind later, you can phone us on 01323 464 699. We will do an assessment to work out how much you need to pay towards your care.
What are the limits?
- If you have more than £23,250, you’ll pay all your care costs.
- If you have between £14,250 and £23,250, we add extra income. For every £250 you have over £14,250, we add £1 a week to your income. You will pay a contribution towards your care from your income.
- If you have less than £14,250, you will usually pay a contribution towards your care from your income.
You do not pay for your care if you are getting ‘aftercare services’ under section 117 of the Mental Health Act.
Your financial assessment
We follow rules set by the government to work out how much you pay for care. These rules are fair and the same for everyone.
We will try to do your assessment quickly so that the money you owe does not build up.
We may:
- use information from the government about your benefits and income
- ask you to use our online financial calculator to do your assessment
- phone you to talk about the best way to do your assessment
During your assessment
If you already pay for your care, keep paying until we finish the assessment.
If your care starts before we finish the assessment, you will pay a set amount. After your assessment, we will work out the real amount. If you paid too much, you’ll get the money back. If you paid too little, we will send you a bill.
Information you will need to provide
Before your financial assessment, you need to have your supporting documents ready. Some examples are:
- letters about your state pension or benefits from the government
- bank statements for all your accounts
- information about your rent or mortgage and council tax
- private pension and annuity income statements
- Premium Bonds and National Savings certificates or books
- share certificates
- details of any property or land that you own
- investments and insurance documents
If you do not give us all the information we need, we cannot finish the assessment. You may need to pay the full cost of your care until you can provide it.
How we look at your finances
We will look at the total amount of money, savings and investments you have. We call this ‘capital’. It includes:
- cash
- bank, building society and Post Office accounts
- ISA accounts
- Save As You Earn (SAYE) accounts
- Premium Bonds or National Savings Certificates
- stocks, shares and bonds
- trust funds
- property and land (but we do not include the value of your home while you live there)
You must tell us about everything you own.
Your income
When we assess how much you should pay towards your care, we include most income, such as:
- most state benefits
- private and workplace pensions
- money from investments and trust funds
- annuities
We will check if you could get more benefits. We want to make sure you get everything you're entitled to.
If you have a workplace pension or retirement annuities, you can give half to a spouse or civil partner who does not live with you. We won't count this.
Keeping money for your own use
You keep £30.65 every week for your own spending. This is your ‘personal expenses allowance’ and the amount is set by the government. We do not pay you this money, but we do not include it when working out your income.
Property
While you live in your home, we don't count its value.
If you own other property or land, such as a second home, we will include this.
Short breaks in a care home
If you are only going into a care home for a short break, we will look at your ongoing costs at home. We might allow for:
- rent or mortgage payments
- Council Tax
- standing charges, like water
Living in a care home permanently
When you move into a care home to live there, we usually include the value of your home.
We may ignore the value of your home for 12 weeks. This is called a ‘12-week property disregard’. It gives you time to decide what to do about your home.
After 12 weeks, we will include the equity in your home. If this means you now have more than £23,250, you will pay the full cost of your care.
We will tell you if you can get a 12-week property disregard.
When we don't count your home
We won't count your home if one of these people still lives there:
- your husband, wife or partner
- a relative who is 60 or over
- a relative who is ‘incapacitated’. This means they receive or are eligible for certain disability benefits
- your child aged under 18
They need to have lived there permanently before your care started.
If your former partner or spouse lives there and they are a single parent, we’ll need to check it's been their home for a long time.
If none of these apply, you can ask us to make an exception. We will look at your individual situation.
Your choices if we include your home
You have several options if you have to pay the full cost of your care:
- A deferred payment agreement.
- Selling your home: You can ask your care provider if they can wait for payment until you sell your home.
- Renting out your home: Whether you can do this depends on your income and whether other people can help to pay for your care. We can give you a list of organisations that can help with looking after your property and renting it out.
- Raising the money through an annuity, loan or equity release scheme.
Deferred payment agreement (DPA)
A ‘deferred payment agreement’ is where the Council lends you the money to pay your care home fees. It may be suitable if:
- you need to pay the full cost of your care
- your savings and other assets are low
- the value of your home puts you over the financial limit
The loan is secured against your home. You’ll pay us back later, either when you sell or after death.
You pay compound interest on the loan, as well as administration and legal charges.
It’s a big decision so it’s best to get advice from an independent financial and legal adviser.
For more information, read our factsheet Going into residential or nursing care when you own a property
Getting financial advice
It’s a good idea to get independent financial advice about paying for a care home. Society of Lifetime Advisors (SOLLA) is a non-profit organisation that helps people with finance in later life. You can find listings of financial advisors on their website:
SOLLA
Phone: 0333 2020 454
Website: Society of Later Life Advisers - SOLLA
If you will pay the full cost of your care, we can give you advice about your options.
Going into a care home which charges more than our usual rates
The Council has a set amount we will pay for residential and nursing care. These are our ‘usual rates’. We will not usually pay more than this.
If you choose a care home that charges more than our usual rates, someone will have to pay the difference. We call this a ‘top-up’ payment. It is usually paid by a relative, friend or charity. They must fill in an application form and show they can afford it, or we will not agree to it.
You cannot agree a top-up directly with a care home if the Council pay towards your care.
You may be able to pay the ‘top-up’ charge yourself during the 12-week property disregard period or under the deferred payment agreement.
For more information, read our factsheet Care home top-up payments
Claiming benefits while you’re in a care home
You can continue to claim some benefits when you are in a care home, but others will stop. We will explain this when we do your financial assessment.
You can claim these benefits if you pay the full cost of your care home fees:
- Attendance Allowance
- Disability Living Allowance (care and mobility)
- Personal Independence Payment (daily living and mobility)
If the council or NHS pay for your care, most benefits will stop after 28 days in a care home. You can find out more about this at Claiming benefits if you’re going into a care home | GOV.UK
Contact the Department for Work and Pensions
Phone 0800 731 0122 for Daily Living Allowance and Attendance Allowance
Phone 0800 121 4433 for Personal Independence Payment
If you are not happy
If you do not agree with the outcome of your financial assessment, you can appeal. We will give you information about this at the end of your financial assessment.
Yearly changes
We will review the amount you pay each year. This is based on changes to the state pension, benefits and the personal expenses allowance (PEA). We will write to you about any changes in the amount you have to pay.
Changes to your financial situation
You must tell us if your financial circumstances change. Please contact us immediately if:
- you get extra benefits or the amount you receive changes
- there are changes to any other income
- your savings or investments change
- you rent your property and the people living in it move out, or their situation changes
If you delay telling us about a change, you might need to repay money.
If you are paying the full cost of your care
If you pay for your own care, tell us before your savings reach £23,250. It’s best to give us six months’ notice. We will work out when you will start to receive financial help from us.
You can also ask us for advice. Contact us and ask to speak to the Finance and Benefits Assessment team.
For more information, read our factsheet Financial assessments if you have been fully funding your care.
How to pay your contribution
You (or your representative) will pay the care home directly. Contact the care home to find out how they want you to pay.
We suggest you set up a Direct Debit or standing order and pay monthly.
You must pay your contribution towards your care. If you don’t pay, we may have to take legal action.
Example of how we work out someone’s contribution
Anne is 68 years old. After a stay in hospital, she decides to move into residential care. She owns her home with a mortgage.
First, we work out how much she has in savings. We do not include the value of her home for the first 12 weeks she is in residential care.
| Savings and assets | Amount |
|---|---|
| Current account | £8,000 |
| Savings account | £10,500 |
| Total savings and assets | £18,500 |
We then look at her income.
Anne has between £14,250 and £23,250 in savings. For every £250 she has over £14,250 we add £1 a week to her income. We call this ‘tariff income’.
| Weekly income | Amount |
|---|---|
| Tariff income (17 x £1) | £17.00 |
| State pension | £241.30 |
| Private pension | £153.70 |
| Total weekly income | £412.00 |
We then look at certain expenses and allowances.
Everyone who lives in a care home can keep a Personal Expenses Allowance of £31.80 per week for living costs.
We can also allow for other costs, such as her mortgage.
| Weekly expenses | Amount |
|---|---|
| Personal Expenses Allowance | £31.80 |
| Mortgage | £105.00 |
| Total expenses | £136.80 |
We subtract her expenses from her income. This gives us the maximum amount she will pay per week.
| Weekly contribution | Amount |
|---|---|
| Income | £412.00 |
| Minus expenses | £136.80 |
| Total contribution | £275.20 |
Anne will pay £275.20 per week for the first 12 weeks.
After 12 weeks, we will include the value of her home in her financial assessment. As this is worth over £23,250, she will need to pay the full cost of her care.
More information
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Email: Health and Social Care Connect
Phone: 0345 60 80 191
Minicom : 18001 0345 60 80 191