What is Means-Tested Care? Understanding How the Financial Assessment Works
Means-tested care refers to care that is funded partly or wholly by the local authority, based on a financial assessment of the person's capital, savings and income. In England, the current threshold is £23,250 in capital and savings. Your loved one's primary home is generally not counted in this assessment — but other property, savings and investments are.
The three tiers
Above £23,250 in capital: your loved one is a self-funder and pays their own care costs in full. Between £14,250 and £23,250: the council contributes, but your loved one still makes a contribution based on a detailed financial assessment of their income and assets. Below £14,250: the council meets most costs, though income is still assessed and a contribution may be required.
What counts as capital?
Savings accounts, ISAs, stocks and shares, second properties and most other assets count as capital. The primary home is disregarded for the first 12 weeks of permanent residential care, and indefinitely while a qualifying person — a spouse, dependent child, or close relative aged 60 or over — continues to live there.
What happens when savings run out?
Many people begin as self-funders and gradually deplete their assets to the threshold, at which point they become eligible for council support. This is an important planning consideration — council rates are often lower than what care homes charge, so preferred homes may not remain available once someone moves to council-funded status. Understanding this trajectory before it happens is essential.
What it does not cover
Means-testing applies to social care funding only. NHS Continuing Healthcare is entirely separate and is not means-tested at all — eligibility is based entirely on health need, not financial position.
Understanding your financial position before you start searching for care can save thousands of pounds and prevent decisions you later regret. Our consultation covers this in detail. Book a consultation →