How Much Can You Save Before You Have to Pay for Care?
Do you know how your savings could affect what you pay for care later in life? It’s a question many families face, especially when organising support for an ageing parent or loved one. The financial rules around adult social care in England are complex — and knowing where you stand can make a real difference when planning ahead.
AtHome Instead New Forest, we support older adults and their families through all stages of care. That includes helping people understand how care is funded, when local authorities get involved, and what the current thresholds mean in real terms.
This article explains what you need to know about how savings and other assets affect care costs, particularly when it comes to residential and nursing care. Whether you’re planning for the future or dealing with an immediate need, having the right information can make the process a little easier.
When Do You Have to Pay for Care?
In England, adult social care is means-tested. This means your income, savings, property, and other financial assets are assessed to determine how much you should contribute towards the cost of your care.
As of 2025, the current thresholds are:
- Savings over £23,250 – You pay the full cost of your care.
- Savings between £14,250 and £23,250 – You contribute from your income and a calculated weekly amount from your savings.
- Savings under £14,250 – You aren’t expected to contribute from your savings, but your income will still be taken into account.
The financial assessment only looks at the assets of the person receiving care. However, if someone has deliberately given away money, shares, or property to avoid paying, the local authority may still include these in the calculation.
Understanding the Needs and Financial Assessment Process
Before funding is discussed, a needs assessment is carried out by the local council. This is free and determines the type and level of care required — whether that’s help at home, day services, or residential care.
If the needs assessment shows that care is needed, a financial assessment follows. This is often called a means test and takes into account:
- State and private pensions
- Benefits (such as Attendance Allowance or Personal Independence Payment)
- Savings, investments, and income from property
- The value of your home (in some situations)
The outcome of this assessment will determine how much financial support you can expect — if any — from the council.
How Savings Are Treated
The rules for how your savings affect care funding are detailed but can be broken down clearly:
- The first £14,250 of your savings is ignored in the financial assessment.
- For savings between £14,250 and £23,250, the council adds £1 per week of “tariff income” for every £250 above the lower limit.
- If you have over £23,250, you are classed as a self-funder and responsible for paying all care costs.
- £14,500 in savings: £250 is counted = £1/week added to your income.
- £15,250 in savings: £1,000 is counted = £4/week added.
- £24,000 in savings: Over the threshold → you pay the full cost of care.
Example Calculations
It’s also important to note that the council may look into any large financial gifts or transfers you’ve made. If they believe these were done to avoid paying for care, they may still include them in the assessment.
What About the Family Home?
The treatment of your home depends on whether you’re receiving care at home or in a care facility:
- If you are receiving care at home, the value of your home is not included in the financial assessment.
- If you move into a care home permanently, the home can be included in the assessment unless it is still occupied by:
- A spouse or civil partner
- A relative aged 60 or over
- A disabled relative under 60 receiving certain benefits
- A dependent child under 16
There is also a 12-week property disregard period after entering permanent care, during which the home is not included in the assessment.
Deferred Payment Scheme (DPS)
Selling a home to pay for care can be an emotional and complicated decision. The Deferred Payment Scheme allows eligible individuals to delay selling their home by letting the council cover care costs and reclaim the money later.
To qualify for the scheme, you must:
- Be receiving care in a residential or nursing home
- Have savings below £23,250 (excluding the value of your home)
- Own a property that isn’t exempt from inclusion
While on the DPS, you still pay from your income and any accessible savings. The care costs build up as a debt and are repaid when the property is eventually sold.
Care at Home: How the Costs Work
If you or a loved one is receiving care at home, the charges are usually based on the number of hours needed and the complexity of care:
- Hourly care typically starts from around £20 per hour
- Live-in care starts from approximately £800 per week and can exceed £1,600 for complex needs
People receiving care at home may be entitled to keep more of their income through something called the Minimum Income Guarantee (MIG), which varies depending on age, disability, and household circumstances.
What If Your Situation Changes?
Temporary stays, hospital admissions, or respite breaks are all treated slightly differently. For example:
- Attendance Allowance might be excluded from the assessment during a temporary care home stay
- If you’re admitted to hospital, your care placement may be held for a short time, and charges could continue
- Your care needs and financial position should be reassessed if your circumstances change significantly
Are There Any Services That Are Free?
Yes — some types of support are not means-tested at all:
- NHS Continuing Healthcare – Full funding for individuals with ongoing, significant health needs
- NHS-Funded Nursing Care – Weekly contributions towards nursing care, currently £219.71 (standard rate)
- Reablement Services – Short-term support, often provided after a hospital stay, usually for up to six weeks
- Section 117 Aftercare – Free care for people who have been detained under the Mental Health Act
- Small adaptations and equipment – Items under £1,000 are typically provided without charge
Planned Changes to Care Funding
The government previously announced reforms to adult social care funding, expected to come into effect from October 2023 (though timelines may change). These include:
- A lifetime cap of £86,000 on personal care costs (this does not include accommodation or daily living expenses)
- Upper capital threshold rising to £100,000
- Lower capital threshold increasing to £20,000
- Over £100,000 – You pay all your care costs
- Between £20,000 and £100,000 – You pay a contribution based on your income and assets
- Under £20,000 – Only income is considered
Under the proposed system:
These changes, once implemented, will affect how future care costs are calculated and what support is available.
Where to Get Trusted Advice
Paying for care can feel overwhelming, especially when financial decisions come alongside emotional ones. If you need help understanding the local authority process or the impact of your savings, there are organisations offering free, independent guidance:
- Age UK – Offers advice on benefits, care funding, and later life planning (call 0800 055 6112)
- Independent Age – Supports older people with clear, impartial information (call 0800 319 6789)
- MoneyHelper – A government-backed service providing financial guidance (call 0800 011 3797)
- PayingForCare.co.uk – An information hub covering care fees and funding options
- Society of Later Life Advisers (SOLLA) – Helps you find qualified financial advisers experienced in later-life care issues (call 0333 2020 454)
Supporting You Every Step of the Way
At Home Instead New Forest we understand how overwhelming it can be to plan or arrange care, especially when finances are involved. Whether you need support at home or are exploring different options, we’re here to help with expert advice and compassionate care tailored to your needs.
If you’d like to speak to someone about care at home in the New Forest area, get in touch with our friendly team today. We’re here to listen, provide guidance, and support you every step of the way.
