What is a financial assessment?
The financial assessment, or means test, establishes how much you’ll have to pay towards the cost of your care. It’s carried out by your local council. It is separate to the care needs assessment to establish what care you require.
Nearly everyone will have to contribute something towards their care home fees. The assessment will look at your income (including certain benefits), and capital (including savings). It may include the value of your home if you own it but this isn't always taken into consideration.
Wealth in the form of money or items that have a financial value. For example, savings, investments, land and property.
What will I have to pay?
Most people will have to contribute all their income, apart from a small Personal Expenses Allowance. This is currently £24.90 a week in England. You might also receive £5.75 a week through the Savings Pension Credit disregard.
Some amounts are ignored when calculating your income, including:
- certain benefits, such as the mobility components of Personal Independence Payment and Disability Living Allowance
- half of private pensions or retirement annuities, if you’re giving them to a partner who is living at home
- the income and savings of your partner
- regular payments from a charity.
If you have capital over £23,250, you’ll have to pay all your care home fees until your capital drops below this amount.
If you have capital of £14,250–£23,250, you’ll have to pay some of your care home fees from this. Your council will also contribute something. You’ll also have to contribute most of your weekly income.
If you have savings and capital of under £14,250, you won’t have to use this to pay your care home fees. You’ll still have to contribute most of your weekly income.
The value of your home isn’t always taken into consideration. For more details, see our factsheet Paying care home fees.
Giving away money and belongings
There are fairly strict rules on this. If you’ve recently given away a lot of money, for example, the council might decide you’ve deliberately deprived yourself of assets to avoid paying care fees, and may still count the amount you’ve given away as part of your income in the financial assessment. Read more about this.
The outcome of the financial assessment
Your council will tell you if they will pay some of your care costs, and if so how much. The total amount they think your care should cost – including their contribution and yours – is called your personal budget. It is based on your assessed needs and factors like the market rate for care in your area.
If the council is contributing to your fees, they must tell you your personal budget. They must show that there’s at least one care home in the area which can provide the care you need for that amount of money. If you’d prefer a more expensive care home, you may be able to move there instead if someone else will pay the difference – for example a family member, friend or charity. This is a third party top-up fee. In a very few circumstances you may be able pay a top-up fee yourself. Read more about this.
Help from the NHS
In certain circumstances, the NHS may be responsible for paying for your care. If you have a high level of health and care needs, you may qualify for NHS Continuing Healthcare. If it has been decided that you need nursing care in a nursing home, you will qualify for NHS-funded nursing care. Read more about this.
Paying for your own care (self-funding)
Even if you’re funding your own care, do get a care needs assessment from your council. The council must then give you a written assessment of your care needs. This will help you to decide if you need to move to a care home. They must also make sure you’re able to get financial information and advice to help you plan and pay for your care.
There are a number of financial products you could consider using, such as long-term care insurance. The quality of these varies considerably, so it’s important to get independent financial advice. See Paying for care yourself for more information.
Where do I start?
A care needs assessment from your local council can help you work out if a care home is the best option for you. After this, you’ll be given a financial assessment to work out whether you qualify for help from the council with the cost of your care. If you haven't yet had a care needs assessment, start by arranging this. Read our factsheet First steps in getting help with your care needs to find out more.
For more information on paying care home fees, read our guide Paying for your care.