What Is a Financial Assessment for Care?

A financial assessment for care (also called a means test) is the process your local council uses to calculate how much you are expected to contribute towards the cost of your care. It looks at your income, savings, and assets to determine whether the council will help fund your care, and if so, by how much.

The assessment is carried out under the Care Act 2014, which places a legal duty on local authorities in England to assess anyone who may have eligible care and support needs, and to determine the level of financial contribution they can reasonably make.

Who carries out the financial assessment?

A Financial Assessment Officer from your local council conducts the means test. It is free of charge and follows a care needs assessment. You do not need to arrange it yourself,  the council will contact you.

The financial assessment is separate from, though usually carried out alongside, the care needs assessment. The needs assessment determines what level of care is required. The financial assessment determines who pays for it.

What does the financial assessment look at?

The assessment considers two things: your income and your capital.

Income includes your State Pension, private or workplace pensions, benefits, and rental income. The council will calculate how much of your income should go towards care costs, leaving you with a minimum amount for personal expenses. For people in a care home, this is set at £30.65 a week for 2026, known as the Personal Expenses Allowance.

Capital includes your savings, investments, and in most cases, the value of your property if you are moving into a care home permanently. The council compares your total capital against two thresholds:

• Upper capital limit: £23,250 - if your assets exceed this, you are expected to fund your own care in full
• Lower capital limit: £14,250 - if your assets fall below this, your capital is not counted, though you will still contribute from your income

If your capital sits between these two figures, you pay a portion based on a tariff of £1 per week for every £250 of capital above the lower limit.

These thresholds have remained unchanged since 2010 despite rising care costs, and apply to England specifically. Scotland, Wales, and Northern Ireland each operate different rules.

Is my home included in the financial assessment?

Your home is included as capital in a residential care financial assessment, but there are important exceptions that mean it may be disregarded entirely or for a period of time.

Your property will not be counted if any of the following apply at the time you move into care:

• Your spouse or civil partner continues to live there
• A relative aged 60 or over continues to live there
• A disabled or incapacitated relative continues to live there
• A dependent child lives there

Even where none of these apply, a 12-week property disregard applies from the point you move into a care home permanently. During those 12 weeks, the value of your home is excluded from the assessment. This period is intended to give you time to consider your options, including whether to sell, rent, or apply for a Deferred Payment Agreement.

If you are considering how your property may be treated, our guide to protecting your home and assets as a spouse covers the rules for couples in more detail.

What counts as capital?

The assessment will consider:

• Savings and current accounts
• ISAs and investments
• Stocks and shares
• Second properties or buy-to-let holdings
• The value of your main home (subject to the disregards above)

The assessment will not count:

• Personal possessions such as jewellery or furniture
• The surrender value of life insurance policies
• Your main home during the 12-week disregard
• Your main home where a qualifying person continues to live there

What happens if I give away assets before the assessment?

The council is entitled to investigate your financial history and has powers under the Care Act 2014 to treat assets you have given away as if you still own them, if it believes the transfer was made to reduce your care contribution. This is known as deprivation of assets.

There is no set time limit on how far back the council can look. The critical test is intent, if it can be shown that avoiding care fees was a motivating factor in the transfer, the council may disregard the transaction and include the asset's value in the assessment regardless.

Our article on deprivation of assets explains the rules in detail, including where deliberate intent is and is not found to apply.

What does the financial assessment conclude?

Following the assessment, your council will issue a written decision explaining:

• Whether you qualify for local authority financial support
• How much you are expected to contribute each week
• Which care home fees will be covered and at what rate

If the council agrees to contribute, it will pay the difference between your assessed contribution and the cost of your care, up to the rate it has agreed with the care home. If you choose a care home that costs more than the council's agreed rate, a top-up fee may be required from a family member or third party. Our guide to care home top-up fees explains how this works.

Can I challenge the outcome of the financial assessment?

Yes. If you believe the council has made an error in its assessment, you can:

1. Request a full written explanation of how your contribution was calculated
2. Raise a concern informally with the assessing officer
3. Submit a formal complaint through the council's complaints procedure
4. Request an independent review if the complaint is not resolved

The council is required under the Care Act 2014 to explain its decisions clearly and to respond to challenges in a transparent and timely manner.

Do I still need a financial assessment if I am planning to self-fund?

Even if your assets are above the £23,250 threshold and you expect to self-fund initially, it is still worth requesting an assessment. Your financial situation may change and care costs in England average around £1,400 per week for residential care and over £1,550 per week for nursing care, and savings can reduce faster than families anticipate. Having an assessment in place means the council can step in more quickly if and when your assets fall towards the threshold.

To understand what happens when self-funding runs out, read our article on what happens when self-funding for a care home runs out.

Does the financial assessment affect the type of care I receive?

No. The level and quality of care you receive is determined by your care needs assessment, not your financial assessment. You are entitled to the same standard of care regardless of how it is funded.

FAQ

What is the difference between a care needs assessment and a financial assessment? A care needs assessment determines what support you require. A financial assessment determines how much you pay for it. Both are carried out by the local authority and are usually done together.

How long does a financial assessment take? Timescales vary by council, but the assessment itself is typically a single meeting or telephone appointment. The written outcome is usually issued within a few weeks.

What if I refuse to take part in the financial assessment? You are entitled to refuse, but the council may then charge you the full cost of your care, even if you would otherwise have qualified for support. Participation is strongly advisable.

Can someone attend the financial assessment with me? Yes. You can bring a family member, carer, or advocate. If you lack mental capacity, someone with lasting power of attorney for property and financial affairs can act on your behalf.

Is the financial assessment the same across the UK? No. The thresholds and rules differ significantly. England applies the £23,250 upper limit. Wales has its own system, and Scotland provides free personal and nursing care regardless of assets. Our Wales care funding guide covers the Welsh rules separately.

Will my partner's savings be included? No. The financial assessment only looks at your own income and capital, not your partner's. However, if you hold assets jointly, your share of those assets will be counted.

Find out more about funding your care

Understanding your options before a financial assessment takes place can make a significant difference to how you plan. Our full care home funding guide brings together everything families need to know, from the means test through to NHS Continuing Healthcare and deferred payments.

If you would like to speak with someone about care at Ashberry and what to expect from the funding process, our teams are happy to help. Make an enquiry and we will be in touch.

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