For many families, this is one of the most anxiety-provoking questions of all. Care fees in England are significant, and self-funding residents often worry about what will happen if savings eventually fall below the required threshold.
Will the resident be asked to leave? Will the local authority step in? Will the family have to pay the difference?
Understanding how the English social care funding system works is essential to reduce uncertainty and plan proactively. The reality is structured, regulated and governed by clear legal frameworks. Running out of money does not mean immediate eviction, but it does trigger an important financial transition.
How Care Home Funding Works in England
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In England, care home funding depends primarily on an individual’s financial assessment. Residents are either classified as self-funders or supported by their local authority.
If someone’s capital exceeds the upper threshold set by the government, they are generally responsible for paying their own care fees. Once assets reduce below that threshold, the local authority may become responsible for contributing to costs, subject to assessment.
This transition is often referred to as “moving from self-funding to local authority funding.”
The Key Financial Thresholds in England
The following table summarises how the financial system operates.
| Capital Level | Funding Responsibility | What It Means |
|---|---|---|
| Above £23,250 | Self-funding | Resident pays full care fees |
| Between £14,250 and £23,250 | Partial local authority support | Means-tested contribution required |
| Below £14,250 | Local authority funded | Resident contributes mainly from income |
These figures apply to England and may be subject to future policy updates. Importantly, property ownership can be included in the financial assessment unless specific exemptions apply.
What Happens When Savings Drop Below the Threshold?
When a resident’s capital approaches the upper threshold, families should notify the local authority well in advance. Waiting until funds are completely exhausted can create unnecessary stress and administrative delays.
The local authority will carry out a care needs assessment and a financial assessment. If eligible, it becomes responsible for arranging and funding appropriate care.
However, there is an important nuance. Local authorities usually operate within standard fee rates. If the current care home charges more than the authority’s agreed rate, a “third-party top-up” may be required. This means a family member or another party agrees to pay the difference.
If no top-up is available and the provider does not agree to accept the local authority rate, relocation may be discussed. This is one of the main concerns families face.
Can a Care Home Evict a Resident for Running Out of Money?
A care home cannot immediately evict a resident simply because their personal funds are depleted. The Care Act 2014 provides legal protections to ensure continuity of care.
If funding responsibility transfers to the local authority, the authority must ensure that suitable accommodation continues to be provided. However, the financial negotiation between the authority and the provider can influence whether the resident remains in the same placement.
This is why early financial planning and transparent communication are critical.
What About the Family Home?
If the resident owns a property and it is not occupied by a qualifying dependent, its value may be considered in the financial assessment after the initial 12-week property disregard period.
Deferred payment agreements may allow care costs to be paid later from the eventual sale of the property. This arrangement can prevent immediate forced sales, but it is not automatic and must be formally agreed. Understanding these options early reduces financial shock later.
NHS Continuing Healthcare: A Crucial Alternative
In some cases, care costs may be fully covered by NHS Continuing Healthcare. This funding is not means-tested but based on primary health needs.
If a resident has complex medical needs, an assessment for NHS Continuing Healthcare should be requested. Eligibility can dramatically change the funding landscape.
Families often overlook this possibility, assuming all care is means-tested when it may not be.
Planning Ahead to Avoid Crisis
Financial exhaustion rarely occurs overnight. It is usually predictable. Regularly reviewing care costs, capital levels and projected timelines enables smoother transitions.
Seeking financial advice early, understanding threshold levels and engaging with the local authority before capital drops below the limit allows greater choice and stability.
The emotional impact of financial uncertainty in later life can be significant. Clear information transforms anxiety into strategy.
FAQ – Care Home Funding in England
What happens if I can no longer afford my care home fees?
If your capital falls below the upper threshold, your local authority may become responsible for funding your care, subject to assessment.
Will I have to move if I run out of money?
Not necessarily. However, if your current care home charges above the local authority’s standard rate and no top-up is arranged, alternative accommodation may be considered.
Does the council automatically step in?
No. You must inform the local authority and request a financial and care needs assessment.
Can my family be forced to pay?
Family members are not legally required to pay care fees unless they voluntarily agree to a third-party top-up.
What if my needs are primarily medical?
If your needs are primarily health-related, you may qualify for NHS Continuing Healthcare, which is not means-tested.
Need help finding a care home?
Senior Home Plus offers free personalized guidance to help you find a care facility that suits your health needs, budget, and preferred location in the UK.
Call us at 0203 608 0055 to get expert assistance today.
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