Paying for care

Local authority funding for care

Jamie Shie

08 Jul 2026 • 6 min read

Working out how to pay for care can feel like one of the most daunting parts of the whole journey. The rules can seem complicated, the terms unfamiliar, and the stakes feel high. But here's the reassuring truth: there's more support available than many families realise, and once you understand how the system fits together, it becomes far less overwhelming.

This guide focuses on local authority funding, the support your council may provide towards the cost of care. We walk through it from the first assessment right through to the different ways you can receive that support, with the language kept plain and the figures up to date for 2026.

(If you think the care needed might be primarily for health reasons, there's a separate route worth knowing about: NHS Continuing Healthcare, which is funded by the NHS and isn't means-tested. We cover that in our companion guide to NHS Continuing Healthcare.)

A quick note before we start: every family's situation is different, and the figures here are national rules that local councils apply with some discretion. Think of this as a map of the landscape, not personalised financial advice. When you're ready for guidance tailored to your circumstances, our Family Care Advisors are always happy to help.

The starting point: a care needs assessment

Before any financial support can be considered, your local authority needs to understand what care is actually required. That's the job of the care needs assessment.

Under the Care Act 2014, every adult in England has the right to request an assessment if they appear to need care and support, regardless of their finances. It's a genuinely important right, and it's free. The assessment looks at a person's physical, emotional, mental and social needs, and decides whether they meet the national eligibility criteria.

You can arrange one through your local council's adult social care department.

What the assessment looks at

To be eligible for support, the council considers whether a person:

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

Those "daily living outcomes" cover the everyday things that help someone live well, including:

Managing and maintaining nutrition
Maintaining personal hygiene
Managing toilet needs
Getting dressed appropriately
Moving around the home safely
Keeping the home clean and habitable
Maintaining family and personal relationships
Accessing work, training, education or volunteering
Using community facilities and services
Carrying out caring responsibilities for others (such as for a child)

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 council decides you have eligible needs, they must draw up a care and support plan. This sets out:

What your care needs are
The outcomes you want to achieve
The support required to meet them

Only then comes the question of money, through a separate financial assessment, often called a means test, which determines who pays for what.

How the financial assessment works

The financial assessment looks at your income, savings and assets to work out one of three outcomes:

The council pays the full cost of your eligible care
You contribute part of the cost
You pay the full cost yourself (known as self-funding)

It's usually carried out by your local authority, and can often be done in person, online or over the phone.

The capital thresholds in England (2026/27)

The key figures are the capital limits, and for the 2026/27 financial year they remain unchanged:

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

Here's what they mean in practice:

If your capital is above £23,250, you'll generally be expected to pay the full cost of your care yourself.

If your capital is between £14,250 and £23,250, the council may contribute, but you'll also pay a means-tested amount from your assets. This is calculated as £1 per week for every £250 of capital between the two limits, known as "tariff income."

If your capital is below £14,250, your savings are no longer counted, and you'll only be expected to contribute from your income.

A crucial point for live-in care: if you receive care in your own home, the value of your property is not counted in the financial assessment. This is one of the most significant advantages of care at home over a permanent move into a residential home, where the value of your property can be included (unless an exemption applies, for example if a partner still lives there). For many families, it means staying at home keeps the family home out of the funding equation entirely.

Protecting your income: the Minimum Income Guarantee

If you're receiving care in your own home, the council can't charge you so much that your income drops below a protected level. This is the Minimum Income Guarantee (MIG), and it's there to make sure you can still cover your everyday living costs.

For 2026/27, the MIG for a single person who has reached Pension Credit age is £241.45 per week. (Different rates apply depending on age, household and circumstances: for instance, it's £120.40 for a single person aged 25 to Pension Credit age.) Whatever your situation, the principle is the same: the council must leave you with at least this amount.

What counts as capital and income?

It helps to know what goes into the calculation.

Capital typically includes savings accounts, ISAs, investments and shares, Premium Bonds, trust funds, cash savings, and, in some circumstances, property.

Income typically includes the State Pension, private or occupational pensions, certain benefits, and income from investments or savings.

The council will also take account of certain essential outgoings when working out what you can afford, such as rent or mortgage payments, council tax, service charges, buildings insurance, and disability-related expenditure. These help build a fair, rounded picture of your finances rather than just looking at the headline numbers.

Personal budgets: putting you in control

If you qualify for support, the council works out a personal budget: the amount it believes is needed to meet your eligible care needs. The genuinely good news is that you have real choice over how that money is managed. There are three main routes, and you can even mix them:

1. Council-managed support. The local authority arranges and pays for your care directly. The simplest, most hands-off option.

2. An Individual Service Fund (ISF). You choose your care provider, and the council pays them directly on your behalf, combining choice with convenience.

3. Direct payments. The council pays the agreed funding straight into your bank account (or a nominated person's), so you can arrange your own care exactly how you want it.

A closer look at direct payments

Direct payments are all about choice, flexibility and independence, putting decisions back in the hands of the people who matter most: you and your family. Rather than the council choosing your services for you, you decide.

You can use direct payments to:

Choose your preferred care provider, including arranging live-in care
Employ a personal assistant
Purchase specialist equipment
Make adaptations to your home
Pay for respite care, short breaks or social activities

How you receive direct payments

Exactly how the money reaches you depends on your council, but the most common arrangements are:

A dedicated bank account: many councils ask for direct payments to go into a separate account used only for that purpose.
A prepaid card: an increasingly popular option, where the council loads payments onto a card for you to use.
A third party: such as a payroll service or an Individual Service Fund managing the money for you (though this may carry an additional cost).

It's worth asking your council which options they offer, as the choices vary from area to area.

You may have heard about proposed reforms to how care is funded in England, including an £86,000 lifetime cap on care costs and more generous capital thresholds. These reforms were planned by a previous government but were cancelled and have not been introduced.

As of 2026, the existing rules described in this guide remain in place, and there is currently no overall limit on the total amount a person might pay towards their care over their lifetime. It's worth being aware of this when planning for the long term.

We're here to help you navigate it

There's no getting around the fact that care funding involves a lot of moving parts: assessments, eligibility criteria, thresholds and forms. But you don't have to work it out alone, and understanding your options early can make a real difference to what's affordable and sustainable for your family.

At Edyn, our Family Care Advisors speak to families about funding every single day. We can help you understand which routes might apply to your situation, explain how the pieces fit together, and point you towards the right next steps, all with the warmth and patience this kind of decision deserves.

Want to talk it through?

Whether you're just beginning to explore your options or you're ready to put care in place, our expert care advisory team would love to help.

Book a family care advice call, or give us a call on 020 3970 9900.