Home › Guides › What happens when the money runs out
The £23,250 threshold is not a cliff edge. The mistake that costs families thousands is contacting the council too late.
Above £23,250 in capital you pay the full cost. Below £14,250 capital is ignored entirely and you contribute from income alone.
Between the two, the council applies tariff income: £1 a week for every £250 of capital, or part of £250. Someone with £18,000 is treated as having £15 a week of extra income they do not actually receive. That is why the assessed contribution is usually more than the pension alone.
Contacting the council after the money has gone.
An assessment takes weeks. Shortfalls are not generally backdated. While the paperwork is in progress the home keeps charging the self-funder rate — typically around 40% above the council rate, according to the Competition and Markets Authority. A three-month delay at a £400 weekly difference is over £5,000.
Councils say this themselves. Hampshire advises getting in touch at £40,000 remaining. Staffordshire says at least four months before reaching the threshold.
The council pays its own rate for your assessed level of need, not whatever the home charges. Published 2026/27 rates run from £768 in Hertfordshire to £1,182 in Devon’s top band; many self-funder fees sit above that.
Three outcomes follow:
The home accepts the council rate. Common where the home values continuity and has vacancies.
Someone pays a top-up. A third party covers the gap, and must be able to keep paying for as long as the placement lasts. The resident normally cannot pay it themselves — see council-funded care homes.
A move. The council must offer at least one suitable home at its own rate. If it cannot find one, it has to pay more.
If our savings fall below the threshold in a few years, will you keep the resident at the council rate?
Ask it before anyone moves in, when you still have a choice, and get the answer in writing. It is the most consequential question in the process and almost nobody asks it.
On a permanent move the property is disregarded for 12 weeks — and indefinitely if a partner, or a relative aged 60 or over, or a disabled relative, still lives there.
If not disregarded, in week 13 it counts as capital and most people become self-funders overnight. Those twelve weeks are the window to arrange a deferred payment agreement, where the council pays and takes a charge on the property to be settled later. Ask whether you are being offered a mandatory or a discretionary agreement — councils rarely volunteer that the discretionary kind exists.
Capital given away to avoid care fees can be treated as though you still hold it. There is no fixed time limit, whatever you read about six months or seven years. What matters is whether avoiding charges was a significant reason for the transfer, and councils can pursue the person who received it.
Reviewed 11 August 2026. Figures are for 2026/27 unless stated. This is information, not financial or legal advice.
We publish prices and register data. We are not an advice service, and for the decisions that follow these are the sources worth your time — all free, none of them selling you anything.