Registered number: 10816512.
Registered office: Squiggle Consult Ltd, Suite 2069, Letraset Building, Wotton Road, Ashford, Kent, TN23 6LN
Squiggle Consult Ltd. is a limited company registered in England and Wales.
A letter or phone call from the local council asking to carry out a financial assessment for care fees can feel alarming, especially if it arrives at a moment when your family already has enough to think about. It shouldn't. The assessment is a routine, structured process, and families who arrive prepared usually find it far less daunting than they feared.
This factsheet explains how the assessment works in England (Wales has a different system), what the council looks at, what it ignores, and what to have ready. The rules are as at July 2026. For the myths that surround this subject, our Care Fees & Your Home: Myths vs Facts factsheet is the place to start.
When an assessment letter arrives, the most valuable thing you can do is also the easiest: carry on as normal. Do not move money between accounts, make gifts, or “tidy up” finances while the assessment is under way without taking advice first. Transfers made after the council has been in touch are exactly what the deprivation rules (explained below) are designed to catch, and even innocent housekeeping can look like something else in hindsight. Engage with the process, gather the paperwork, and let the documents speak.
If you ask your local council to help fund care, at home or in a care home, it must first carry out a care needs assessment (a free assessment of what care is actually needed), and then a financial assessment (a means test of your income and capital). The council arranges both; you don't need to organise anything yourself, and the assessment itself costs nothing.
The means test looks at one person's finances only. Councils have no power to assess a couple's joint resources. Each person is assessed individually, and only on their own share of anything owned jointly.
For the 2026/27 financial year, the capital limits in England are:
There is currently no overall cap on how much one person can pay towards care in England. The cap announced in previous years was abandoned before it came into force, and no replacement is in force as at July 2026.
If you move into a care home with council support, you must be left with a Personal Expenses Allowance of at least £31.80 a week. If you receive care at home, the council must instead leave you with a Minimum Income Guarantee to cover ordinary living costs. And for care in your own home, the value of your main or only home is never counted at all.
Your home only enters the means test if you move permanently into a care home. Even then, it must be disregarded (left out entirely) while it is still lived in, as their main home, by someone who was living there when you moved into care and who is:
Two more protections are worth knowing. The 12-week property disregard means the value of your home is ignored for the first 12 weeks of a permanent care home stay, giving families breathing space. And a deferred payment agreement, where you qualify, lets the council secure fees against the home (like a loan, with interest, repaid later, usually from the estate) rather than forcing a sale during your lifetime.
The financial assessment is mostly a paperwork exercise. Having these ready makes it quick:
If a parent's capacity is declining and no Lasting Power of Attorney exists yet, act on that now, while it can still be made. The council must deal with someone who holds proper authority.
Ask for the written record of the assessment: the council must give you one showing how the figures were worked out. The assessment is also a good moment for a benefits check, as it often uncovers unclaimed Attendance Allowance or Pension Credit.
If the council believes you have deliberately given away assets (money, property, or assets moved into a trust) with avoiding care charges as a significant motive, it can apply the deprivation of assets rules: assessing you as if you still owned the asset (“notional capital”), and in some cases pursuing the person who received it.
Two things matter here. First, there is no time limit. The “seven-year rule” belongs to Inheritance Tax and has no place in care-fee assessments. Second, motive and foreseeability are the tests: a transfer made when you were fit, healthy and had no reason to expect care needs is on much stronger ground than one made when care was visibly approaching. The council must not simply assume deprivation; it has to consider whether avoiding charges was a significant motivation, and its decision can be challenged through the complaints process and then the Local Government and Social Care Ombudsman.
The strategy that always works is honesty: answer questions about past transfers openly and keep the paper trail.
Some care is free regardless of wealth, and it is always worth asking about before accepting a lifetime of fees. NHS continuing healthcare is a full package of care funded entirely by the NHS where someone's primary need is a health need; our NHS Continuing Healthcare factsheet explains it in detail, including how to ask for an assessment. NHS-funded nursing care pays a weekly amount direct to a nursing home where a registered nurse's care is needed. Intermediate care and reablement (up to six weeks) and aftercare under section 117 of the Mental Health Act are also free.
Imagine Ted, who moves permanently into a care home while his wife June stays in their jointly owned house. The house is disregarded entirely while June lives there, so the assessment looks only at Ted's half of their savings and his income. His share comes to £30,000, so he starts as a self-funder; once it falls below £23,250 the council begins to contribute, with Ted paying tariff income on the capital between the limits. The assessor's written record shows the workings, and the benefits check picks up an Attendance Allowance claim the family had never made. This is a hypothetical example for illustration only.
Moving money after the letter arrives. Transfers made once an assessment is in prospect are the easiest deprivation findings a council ever makes. Take advice before touching anything.
Applying the seven-year rule. It is an Inheritance Tax concept. For care-fee deprivation there is no time limit whatsoever.
Assuming the home counts while a spouse lives in it. It does not. Families have panicked, and made rash transfers, over a scenario the disregards already prevent.
Not asking for the written record. You are entitled to see how the figures were worked out, and you cannot challenge what you have never seen.
Skipping the NHS questions. If needs are primarily health needs, NHS continuing healthcare may fund everything, regardless of wealth. Ask before accepting a means-tested outcome.
Facing it without authority in place. If capacity is failing and there is no Lasting Power of Attorney, everything becomes slower and harder. Put LPAs in place while they still can be made.
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This factsheet is general information for England and Wales, not legal, tax or financial advice. Last reviewed: July 2026.
Registered number: 10816512.
Registered office: Squiggle Consult Ltd, Suite 2069, Letraset Building, Wotton Road, Ashford, Kent, TN23 6LN
Squiggle Consult Ltd. is a limited company registered in England and Wales.
