Care Fees & Your Home: Myths vs Facts

Few subjects in later-life planning generate more fear, more myths and more bad selling than care fees. The fear is understandable: care is expensive, and the idea of a family home being "swallowed" by fees is distressing. But fear makes people easy to sell to, and an entire industry exploits exactly that. This factsheet tests the most common claims against how the rules in England actually work as at June 2026.

First, the basics: how the means test works

If you ask your local authority to fund social care in England, at home or in a care home, it carries out a financial assessment (a means test) of your income and capital. The capital limits for 2026/27 are:

• Capital above £23,250: you pay your care fees in full. The council calls this being a self-funder.
• Capital between £14,250 and £23,250: you contribute from your income, plus £1 a week for every £250 (or part of £250) of capital above the lower limit. This is called tariff income.
• Capital below £14,250: your capital is ignored and only your income is assessed.

Those limits have not moved since 2010. Our Local Authority Care Fees: The Financial Assessment Explained factsheet sets out the full mechanics, including what the council counts, what it leaves you to live on and what to have ready.

It also helps to know what care actually costs, so you can judge any figure you are quoted. Government does not publish an average weekly rate for people funding their own care. The care home directory carehome.co.uk does, and in its 2026 care home costs guide, using fee data dated September 2025, it puts the UK average for a self-funder at £1,298 a week for residential care and £1,535 a week for nursing care. Those are industry figures, not official ones, and they vary a great deal by region and by the type of care needed. The same guide shows residential care averaging £1,112 a week in the North East and £1,548 a week in London, so check what homes near you charge rather than relying on a national average.

There is currently no overall cap on how much one person can pay towards care in England. The planned cap was abandoned in July 2024, and as at August 2026 no replacement is in force.

Whether your home counts as capital is the question behind most of the myths.

Myth 1: "The council will automatically take my house"

Fact: The local authority does not "take" anyone's house. What can happen is that the value of your home counts as capital in the means test, making you a self-funder, meaning fees are payable, and the home may eventually need to be sold or borrowed against to pay them. That is very different from confiscation. Your home is never counted while you are receiving care in your own home: it only enters the assessment if you move permanently into residential care, and even then it is often disregarded, as the next myth explains. Where you meet the criteria, the council is required to enter into a deferred payment agreement, securing the fees against the home for settlement later, so a forced sale during your lifetime is not the default. Our financial assessment factsheet explains the conditions.

Myth 2: "The home always counts in the means test"

Fact: The home is disregarded, meaning left out of the assessment entirely, where it is still lived in as their main home by someone who was living there before you moved into care and who is:

• your spouse, civil partner or partner, unless you are estranged;
• a relative aged 60 or over;
• a relative who is incapacitated, broadly meaning they receive or would qualify for a disability benefit such as Attendance Allowance or PIP;
• your child under 18.

There is also a temporary disregard for the first 12 weeks of a permanent care home stay, and the authority has discretion to disregard the home in other deserving cases (for example, a long-term carer living there). So a husband is not forced to sell the family home while his wife still lives in it: while she lives there, the house does not count.

Myth 3: "Just give the house to the kids, after seven years it's safe"

Fact: The "seven-year rule" belongs to Inheritance Tax, not care fees. For care-fee means testing there is no time limit at all. If the local authority concludes you deprived yourself of an asset, gave it away, sold it at undervalue, or put it into trust, with avoiding care charges as a significant motive, it can apply the deliberate deprivation of assets rules: assessing you as if you still owned the asset ("notional capital"), and in some cases pursuing the recipient of the gift. The authority looks at your motive, health and foreseeable care needs at the time. A gift made when you were fit and healthy is on much stronger ground than one made the month after a dementia diagnosis, but there is no waiting period after which a deprivation becomes unchallengeable.

Giving the house away also creates risks beyond the means test: you lose ownership and security in your own home, and the house becomes exposed to your children's divorces and bankruptcies.

Myth 4: "Put your house in a trust and the council can't touch it"

Fact: This is the most heavily marketed scheme in the field, "asset protection trusts" or "family protection trusts," often sold at seminars or doorstep visits with high upfront costs. The pitch quietly skips the central problem: transferring your home into a trust is just as challengeable under the deliberate deprivation rules as giving it to your children directly. If avoiding care fees was a significant reason, the authority can treat the house as still yours, with no time limit, leaving families with the fees still assessed, a home locked inside a trust, ongoing trustee obligations (including HMRC registration), and possible tax complications on top. Some firms that sold these schemes in volume have since collapsed. If a scheme's headline promise is dodging care fees, treat that as a warning, not a feature. Our Trust Administration factsheet explains what running a trust genuinely involves.

Myth 5: "There's nothing legitimate you can do, then"

Fact: There is sensible, honest planning. It just looks different from the pitches.

• Put Lasting Powers of Attorney in place. Nothing else works if nobody has authority to act when you cannot. This is the only step with a hard deadline, because it can only be done while you still have capacity.
• Own your home as tenants in common rather than joint tenants. That gives each of you a distinct share to leave by your Will, instead of the whole house passing automatically to the survivor.
• Leave your share into a life interest trust in your Will. Your partner can live there for the rest of their life, and the capital then passes to the people you chose. Planning that takes effect on death is not a deprivation of assets, because you cannot deprive yourself of something after you have died.
• Ask about NHS continuing healthcare before you accept any bill. Where the main need is a health need, the NHS may fund the whole package, care home fees included, with no means test at all. Our NHS Continuing Healthcare factsheet explains how to ask.
• Claim everything you are entitled to. Attendance Allowance and Pension Credit go widely unclaimed, and neither is affected by the value of your home.
• Keep a record of any gift you do make. The date, the amount and the reason at the time. Honest paperwork is the best answer to a deprivation question, and it is free.

None of this is a guarantee, and we would not offer you one. A council can look at any transaction, at any time, with no seven-year cut-off. What these steps have in common is that they stand up to being asked about, and that timing matters: planning done in good health as part of ordinary arrangements sits on far firmer ground than the same steps taken once care is in prospect.

A worked example

Imagine Ted and June, married, owning their £350,000 home jointly with £60,000 in savings. A salesman quotes a frightening weekly care-home figure and offers a lifetime "protection trust." Instead, they take advice: ownership is changed to tenants in common, each makes a Will leaving their half-share into a life interest trust for the other, then to their daughter, and both make Lasting Powers of Attorney. Years later Ted dies; later still, June needs residential care. The means test counts June's savings and her own half-share of the house, and on those figures she is still a self-funder. What the planning achieved was different: Ted's half belongs to his trust, so it is not June's capital and cannot be spent on her care. It passes to their daughter under the trust terms. Nothing was hidden and nothing was deprived. The planning happened in Wills, on death, exactly as the law allows. It did not make June's care free, and no honest plan would claim to. This is a hypothetical example for illustration only.

Common mistakes

Applying the seven-year rule to care fees. It is an Inheritance Tax concept. For deprivation of assets there is no time limit whatsoever.

Signing up to a trust scheme at a seminar or home visit. High pressure, big fear, an upfront cost and a guarantee about care fees: that combination should send you for independent advice first.

Assuming the home counts while a spouse or partner still lives in it. It does not. Families have panicked, and made rash transfers, over a scenario the disregards already prevent.

Giving the house away while continuing to live in it. Beyond the deprivation risk, this can create Inheritance Tax problems (a "gift with reservation of benefit") and leaves your security in your own home dependent on your children's goodwill, marriages and creditors.

Never asking about NHS continuing healthcare. Where needs are primarily health needs, full NHS funding may be available regardless of wealth. It is not easy to obtain, but failing even to ask can cost a family dearly. Our NHS Continuing Healthcare factsheet explains how to ask for an assessment.

Doing nothing because the subject is frightening. LPAs and properly structured Wills are entirely legitimate and useful in every scenario, care or no care.

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This factsheet describes the position in England. Wales operates a different charging system with different limits. It is general information, not legal, tax or financial advice, the rules can change, and you should take advice on your own circumstances. Last reviewed: August 2026.