We understand that care can be expensive, and many families are unaware that financial support may be available through their local authority. Understanding your funding options is an important first step when arranging care for yourself or a loved one.

In England, local authorities have a legal duty to assess anyone who appears to need care and support. If eligible, you may receive financial assistance towards the cost of care at home, live-in care, or residential care.

The First Step: A Care Needs Assessment

Before any financial support can be considered, your local authority must carry out a care needs assessment.

Under the Care Act 2014, every adult has the right to request an assessment if they may need care or support. The assessment looks at a person’s physical, emotional, mental, and social care needs and determines whether they meet the national eligibility criteria.

The assessment can usually be arranged through your local council’s adult social care department.

What the assessment considers

The local authority will consider whether a person:

• Has needs arising from a physical or mental impairment or illness
• Is unable to achieve two or more specified daily living outcomes
• Experiences a significant impact on their wellbeing as a result

Examples of daily living outcomes include:

• Managing and maintaining nutrition
• Maintaining personal hygiene
• Managing toilet needs
• Dressing appropriately
• Moving safely around the home
• Maintaining a habitable home environment
• Developing and maintaining relationships
• Accessing work, training, education, or volunteering
• Using community facilities and services safely
• Carrying out caring responsibilities for others

If all three conditions are met, the person is likely to qualify for support under the national eligibility criteria.

What Happens After the Assessment?

If the local authority determines that you have eligible care needs, they must create a care and support plan outlining:

• Your care needs
• The outcomes you want to achieve
• The support required to meet those needs

The council will then carry out a financial assessment, often referred to as a means test, to determine how much support you may receive.

What Is the Financial Assessment?

The financial assessment looks at your income, savings, and assets to determine whether:

• The council will contribute towards your care costs
• You must pay for your care yourself
• You will need to make a partial contribution

This assessment is usually completed by your local authority and may take place in person, online, or over the phone.

Current Funding Thresholds in England (2026/27)

As of the 2026/27 financial year, the capital thresholds in England remain:

• Upper capital limit: £23,250
• Lower capital limit: £14,250

If your assets are above £23,250

You will usually be expected to pay the full cost of your care.

If your assets are between £14,250 and £23,250

The local authority may contribute towards your care costs, but you will still be expected to contribute from your income and savings.

A tariff income applies at a rate of:

• £1 per week for every £250 of savings between the two limits

If your assets are below £14,250

You will generally only be expected to contribute from your income.

Important: If you receive care in your own home, the value of your property is usually ignored during the financial assessment. If you move permanently into a residential care home, the value of your home may be included unless an exemption applies.

What Counts as Capital?

Capital may include:

• Savings accounts
• ISAs
• Investments and shares
• Premium Bonds
• Property (in some circumstances)
• Trust funds
• Cash savings

What Counts as Income?

Income may include:

• State Pension
• Private or occupational pensions
• Attendance Allowance
• Pension Credit
• Universal Credit
• Employment income
• Income from investments or savings

What Expenses Are Considered?

The council may also consider certain essential outgoings, including:

• Mortgage or rent payments
• Council tax
• Service charges
• Disability-related expenditure
• Buildings insurance

Personal Budgets

If you qualify for support, your local authority will calculate a personal budget.

A personal budget is the amount the council believes is required to meet your eligible care needs.

You may choose to receive this support in different ways:

1. Council-Managed Support

The local authority arranges and pays for your care services directly.

2. Individual Service Fund (ISF)

You choose the care provider, but the council pays them directly on your behalf.

3. Direct Payments

The council pays the agreed funding directly into your bank account, allowing you to arrange your own care and support.

What Are Direct Payments?

Direct payments give you more flexibility and control over how your care is delivered.

You can use direct payments to:

• Choose your preferred care provider
• Arrange live-in care
• Employ a personal assistant
• Purchase specialist equipment
• Make home adaptations
• Pay for respite care or social activities

Many people prefer direct payments because they allow greater choice and independence.

NHS Continuing Healthcare (CHC)

Some people may qualify for NHS Continuing Healthcare, which is a package of care funded entirely by the NHS.

Unlike local authority funding, NHS Continuing Healthcare is not means-tested.

Eligibility depends on whether a person has a primary health need.

Conditions that may qualify include:

• Complex medical conditions
• Significant nursing needs
• Rapidly deteriorating health
• Severe physical disabilities
• Advanced dementia
• Neurological conditions
• End-of-life care needs

If you believe you or your loved one may qualify, you can ask your GP, social worker, or hospital team for a Continuing Healthcare assessment.

Changes to Social Care Reform

You may have heard about proposed reforms to adult social care funding in England, including:

• An £86,000 cap on care costs
• Higher capital thresholds

These reforms were proposed by the previous government but have not been implemented. As of 2026, the existing thresholds and funding rules remain in place.

Getting Support

Applying for care funding can feel overwhelming, particularly when trying to understand assessments, eligibility criteria, and financial rules.

At edyn.care, our family care advisors can help guide you through the process and explain the funding options that may be available to you.This is your regular monthly outgoings. Expenses will be used to understand your net income. This will help the assessor build up a well-rounded view of your financial circumstances - mortgage payments, rent - if you pay it, council tax, service charges or ground rent, building insurance, and disability-related expenditure.

As soon as your capital and income drop below £23,250 the council will start paying for your care. £23,250 is known as the upper capital limit. There is also a lower capital limit which is £14,250.

If you have assets between £23,250 and £14,250, the council will pay for your care. However, they’ll also expect you to pay £1 per week for every £250 you have between the limits. This is called the ‘tariff income’.

If you have assets below £14,250, you’ll be expected to pay what you can afford from your income. If you’re in this group, you’ll be expected to contribute any income above £189 per week towards paying for your care.

What is a personal budget?

A personal budget is the amount of money your local council will pay towards any social care and support you need, such as live-in care.

The amount of money in your personal budget is decided by your local council after a needs assessment to work out:

• What kind of care and support you need
• How much it will cost
• How much you’re able to afford yourself

Is your personal budget paid into your bank account?

It can be. There are three main ways your personal budget can be controlled. Or you can arrange a mixture of the three:

Indirect payments: the council manages the budget and will choose and pay for your care services on your behalf.

An individual service fund: you choose the care services you want and the council pays the companies on your behalf.

Direct payments: the council pays your personal budget into your bank account or that of someone nominated by you.

What are direct payments?

Direct payments give individuals greater choice and control over the support they receive and how it’s provided.

Instead of receiving direct support arranged by your council, you have the ability with direct payment to choose and purchase the service you feel you need. They are central to the objective of personalising social care and they have a big role to play in giving back control to the people who matter most - you.

A direct payment is when the council pays your personal budget into your bank account or the bank account of someone nominated by you. Instead of council picking and choosing which care services are right to meet your care needs, you do.

What you can spend direct payments on?

You can use your direct payment to pay for services, equipment, or activities that meet your eligible care needs for example.

Example of things you buy with your direct payment:

• Pick whatever care agency you like best
• Purchase specialist equipment
• Make adaptations to your home
• Employ a personal assistant to help you
• Short breaks and leisure activities
• Pay for social activities or daycare centres

If you get direct payments, how do you actually access the money?

The options will usually vary depending on the arrangements made by each council. The most common options are:

Bank accounts: most councils require direct payments to be paid into a separate account which you only use for direct payments. This usually means you have to open a new account. The simplest and most common way is to open a standard current account.

A third party: an accountant, or an individual service fund (ISF), or payroll services are an option but keep in mind that this will add extra cost that will come out of your personal budget.

Small, one-off deposits without a separate account: some councils offer small schemes where payments up to an agreed limit (e.g up to £500) are paid into your own, original bank account. This way you don’t have to open a new account. This option is more suitable if you are just looking to buy equipment or use a service once.

Vouchers: some councils offer vouchers, but this will likely restrict the products and services you can buy to a limited number of companies. They are not a very popular option.

Prepaid cards: this option is relatively new, but more and more councils are now offering this option. The council gives you a special card and they load payments onto it. You don’t have to have a bank account, but some require you to use systems similar to telephone banking or internet banking.

NHS Continuing Healthcare

NHS continuing healthcare is a package of care arranged and funded solely by the NHS for individuals who are not in hospital and have been assessed as having a “primary health need” who require a lot of nursing support.

Most people with long-term care needs don’t qualify for NHS Continuing Healthcare or Care as the assessment is quite strict. If your loved one is approaching the end of their life, then a “fast track” Continuing healthcare funding assessment may be appropriate.

In England, the NHS can arrange care for you or you can choose to receive a direct payment, known as a personal health budget.

The current ‘eligible’ health needs include:

• Complex medical conditions that need additional care and support
• Long-term medical conditions
• Physical or mental disabilities
• Terminal illnesses
• Rapidly deteriorating health
• Mobility problems
• Behavioral or cognitive disorders

Despite the strict guidelines, free healthcare could save you thousands of pounds each year, so it’s essential that you find out if you’re eligible. To find out if you’re eligible, you can ask your GP or social worker to arrange an assessment.

The Money Advice Service website provides a comprehensive guide on NHS Continuing Healthcare and how to apply.