Figures in this article are accurate as at April 2026. Capital limits, care costs, and FSCS protection levels are subject to change. Please check current guidance at gov.uk and fscs.org.uk before making any decisions.

Going into residential care is a significant life change. Understanding how your savings are treated before you need to means you can plan ahead, not react under pressure.

Here, we cover the basics of how your savings are treated in a care funding assessment in England. The rules differ in Scotland, Wales, and Northern Ireland, so if you are based outside England it is worth checking the rules that apply to you specifically.

The financial assessment

When someone moves into a care home and needs the local council to contribute to the cost, the council carries out a financial assessment. This assessment looks at your savings, income, and assets to work out how much you are expected to contribute.

The outcome depends on where your savings and assets sit in relation to two thresholds.

The thresholds – what they mean

For 2026 to 2027, the capital limits remain at their current level: £23,250 for the upper capital limit and £14,250 for the lower capital limit. GOV.UK

If your savings and assets are above £23,250, you are classed as a self-funder. This means you pay the full cost of your care yourself. Residential care costs vary significantly by location and provider. For current estimates, Age UK and Which? publish regularly updated guidance. You continue to self-fund until your assets fall below the £23,250 threshold, at which point the council begins to contribute.

If your savings and assets are between £14,250 and £23,250, the council contributes to your care, but you are also expected to make a contribution. This is calculated as £1 per week for every £250 of capital between the two thresholds. GOV.UK

If your savings and assets are below £14,250, your capital is not counted in the assessment. You may still be asked to contribute from your income, but your savings themselves are not taken into account.

What counts as assets in a financial assessment?

The assessment looks at the savings and assets of the person needing care only – not those of a partner or spouse. This includes savings accounts, current accounts, cash, and investments.

Your savings accounts – including Fixed Term Deposits, easy access accounts, notice accounts, and Cash ISAs – are included in the assessment at their current value. For any jointly held accounts, only your share is included, typically 50% of the balance.

Your home is usually included in the assessment if you own it. However, there are important exceptions. Your property is disregarded if your spouse or partner lives there, or if a relative aged over 60 lives there, or if a divorced or estranged partner who is a lone parent lives there.

If none of those apply, you get a 12-week property disregard. For the first 12 weeks in care, the property is not counted if you have less than £23,250 in other assets. This gives you time to arrange finances, sell, or set up a deferred payment agreement.

What does not count

Personal possessions, household contents, and certain benefits are not included in the assessment. The value of any business assets may be treated differently depending on circumstances.

It is also worth knowing that NHS Continuing Healthcare exists as a separate route entirely. NHS Continuing Healthcare is a package of care arranged and funded solely by the NHS where someone is found to have a primary health need – meaning their need for care is primarily due to health rather than social care needs. House of Commons Library Eligibility is not based on a specific diagnosis or age, but on the nature, intensity, complexity and unpredictability of someone’s needs.

If you think this might apply to you or a family member, you can ask your GP, a hospital discharge team, or your local Integrated Care Board to begin an assessment. Further information is available on the NHS website at https://www.nhs.uk/conditions/social-care-and-support-guide/money-work-and-benefits/nhs-continuing-healthcare/ .

What this means for your savings

If you were to need residential care, it is likely you would initially be self-funding – meaning your savings would be used to meet care costs until your total assets reduced to the threshold level.

Understanding the rules means you can think clearly about how much you want to keep accessible, how your savings are structured, and whether it makes sense to speak to an independent financial adviser about your specific situation.

Your savings and FSCS protection

If you are a self-funder, your savings will be used to meet care costs over time. As your balance reduces, it is worth keeping in mind how your money is protected.

Eligible deposits with OakNorth are protected up to £120,000 per person by the Financial Services Compensation Scheme (FSCS), the UK’s deposit guarantee scheme. If you hold savings across more than one bank, the £120,000 limit applies separately to each authorised institution. Joint accounts are protected up to £240,000 between two account holders. Any deposits you hold above these limits are unlikely to be covered.”

“If your savings are spread across multiple banks, it is worth checking that each balance sits within the FSCS limit. More information on FSCS protection is available at fscs.org.uk.

A note on financial and care funding advice

This article is for general information only. OakNorth does not provide financial or care funding advice.

For free, impartial guidance on care funding, visit MoneyHelper. If you are unsure how care costs might affect your personal finances, an independent financial adviser regulated by the FCA can help.