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Join Which? MoneyWhat happens to your pension and benefits when you move into a care home
Find out which benefits will continue if you move into a care home - and which may be stopped
Holly covers personal finance topics from credit cards to wills. She enjoys turning complex money matters into clear, practical advice.
In this article
- Will moving into a care home affect my finances?
- What benefits can I still get if I move into a care home?
- What benefits will stop if I move into a care home?
- What happens to my income, savings and pensions if I get council funding for a care home?
- Deferred payment agreements and your income
- What happens to my benefits if I go into hospital?
- Where can I find advice on paying for care?
Will moving into a care home affect my finances?
Moving into a care home can have a significant impact on your finances. Your eligibility for benefits may change and you will probably have to contribute some of your income (including your state pension) towards the cost of care.
How the move affects your finances will depend on whether you are paying for your own care (known as 'self-funding') or if a local authority is contributing to the cost of your care. The move can also affect the benefits that your partner or someone who is caring for you is entitled to receive.
This is a complicated area and it’s recommended that you seek advice about how moving into a care home will affect your income and benefits.
What benefits can I still get if I move into a care home?
The following benefits can be paid if you live in a care home. Which benefits you’ll receive and how much you’ll get depends on your eligibility and whether you pay for care yourself or are funded by the local authority.
- State pension
- Attendance allowance (pension age disability payment in Scotland) if you pay all of your own care fees
- Bereavement support payment
- Personal independence payment (PIP), disability living allowance (DLA) or adult disability payment in Scotland (if your care is funded by the local authority you won’t receive the daily living component)
- Pension credit - although the amount you receive may change
- Armed forces independence payment
- Employment and support allowance (ESA) - although the amount you get may change
- Industrial injuries disablement benefit
- Maternity allowance
- Statutory maternity pay
- Statutory sick pay
- Universal credit
Once you are living in a care home, you and your partner will no longer be treated as a couple when it comes to benefit claims, so your partner may need to apply for benefits as a single person.
Be aware that if your local authority pays some or all of your care fees, you might have to contribute some of your income from benefits towards the cost of your care. We explain this in more detail below.
You need to let the organisations that pay your benefits know if you move into a care home for one night or longer. If you receive multiple benefits you might need to contact multiple organisations.
Which organisations you’ll need to contact depends on where you live. You can find more information and contact details for the relevant organisations on the following government sites:
- England and Wales: Gov.UK
- Scotland: Mygov.scot
- Northern Ireland: nidirect.gov.uk
What benefits will stop if I move into a care home?
Some benefits will stop or change if you move into a care home.
Disability benefits
If the local authority is paying some or all of your care home fees, the following disability benefits will stop after 28 days in a care home:
- Attendance allowance (pension age disability payment in Scotland)
- PIP daily living component, DLA care component or adult disability payment daily living component (Scotland)
- If you receive the severe disability addition of pension credit, you will lose this entitlement when you stop receiving the above qualifying disability benefits.
If you come out of the care home (for example, if you go into hospital), even if only for a few days, attendance allowance payments will resume. They will be stopped again on your return to the care home.
These disability benefits will continue to be paid in full if you pay your own care home fees.
Carer’s allowance
Carer's allowance, or carer support payment in Scotland, will stop if you have been looking after someone else.
Similarly, if someone has been receiving either of these benefits because they've been looking after you, their benefit will stop if you move into a care home permanently.
If you're moving into a care home, you or your carer should contact the relevant organisation in your nation. If the person looking after you receives other benefits, their claims for these benefits may also need to be updated.
Benefits that help you pay for housing
Benefits that help you pay your rent, mortgage or council tax will be stopped if you move into residential care permanently.
In England, Wales and Northern Ireland the NHS will sometimes cover the cost of a care home through the NHS continuing healthcare (CHC) scheme or NHS-funded nursing care schemes.
These schemes operate slightly differently in England and Wales and Northern Ireland. Visit Moneyhelper for more information.
In Scotland, free personal and nursing care is provided by local authorities.
What happens to my income, savings and pensions if I get council funding for a care home?
Local authority funding for care is means-tested. The council will look at the value of your income (including pension and benefits) and capital (savings, property and assets) to work out whether you can afford to pay for some or all of your care.
The council will contribute towards the cost of care if your capital is below a certain threshold, known as the upper capital limit.
This table shows the capital limits across the UK for 2026-27:
| Lower capital limit | Upper capital | |
|---|---|---|
| England | £14,250 | £23,250 |
| Northern Ireland | £14,250 | £23,250 |
| Scotland | £22,750 | £36,750 |
| Wales | n/a | £50,000 |
If the local authority agrees to pay some or all of your care home fees, your income, pension and savings will be affected in the following ways:
- If your capital is below the lower limit, you will have to contribute some of your income (including the state pension) towards the cost of your care.
- If you capital is between the lower and upper limits, you'll have to contribute some of your income (including the state pension) towards the cost of care, as well as a 'tariff income': this is £1 a week for every £250 of savings you have between the two limits.
- If you have a private pension, half of this can be passed over to your spouse and won't be taken into consideration for the means test.
- You will no longer receive certain benefits (see above).
You must be allowed to keep a minimum weekly income, known as the personal expenses allowance (PEA) or minimum income amount (MIU) in Wales. This table shows the allowances for 2026-27:
| PEA/MIU | |
|---|---|
| England | £31.80 |
| Northern Ireland | £36.62 |
| Scotland | £37.65 |
| Wales | £46.35 |
You'll need to let your local council know if your financial circumstances change significantly while you're living in a care home - for example, if you inherit a large sum of money.
Similarly, if your savings fall below either of the capital limits you should let your council know, as this will affect how much you need to contribute to the cost of your care.
- Find out more: council funding for social care
Deferred payment agreements and your income
If you move into a care home in England, Scotland or Wales and you don't wish to sell your home, you can apply to your local council for a deferred payment agreement (DPA) to help pay your care home fees.
Under a DPA, the local authority pays your care home fees and you don't have to repay them until you've sold your home or after your death.
Entering into a DPA may affect your income, including state pension and any private pensions. The local authority will carry out a financial assessment and unless you have a relatively low income, you will be expected to use part of your income to contribute to the care home costs.
In England, you are entitled to keep a 'disposable income allowance' of up to £144 per week.
You can still receive benefits like attendance allowance and PIP if you have a DPA. It’s recommended that you claim all the benefits you’re entitled to in order to reduce your debt to your local authority.
Any income contribution you make under the agreement reduces the amount you defer. This means there will be less to pay back when the agreement ends.
- Find out more: care home costs
What happens to my benefits if I go into hospital?
A stay in hospital can affect your benefits, and it’s important to contact the relevant organisations if you go into hospital. If you don't report a hospital stay, you may have to pay back overpaid funds or your benefit could be stopped or reduced.
The following disability benefits will stop after you’ve been in hospital for 28 days:
- Attendance allowance and pension age disability payment
- Disability living allowance
- Personal independence payment.
If you're discharged but then return within 28 days, the number of days you were in hospital are added together. If they total more than 28 days, your benefits will be stopped until you return home or to a care home.
The same principle applies if someone receives carer's allowance or carer support payment for looking after you.
Where can I find advice on paying for care?
The rules around how paying for care affects your benefits, savings and income are complicated. It’s a good idea to seek advice or guidance to understand how the rules apply to you.
Benefits advice
An expert benefits adviser can help you understand how moving into a care home will affect your benefits entitlement.
You should be able to access free, confidential benefits advice through your local authority, local Citizens Advice service or specialized charities. Use Turn2Us's Find an Adviser tool to find a benefits advisers in your area.
Independent financial advice
It’s a good idea to seek advice if you have complicated financial arrangements, as an independent financial adviser will be able to provide recommendations based on your personal circumstances. Use our guides to find out more about how much financial advice costs and how to find a good adviser.
Some financial advisers specialise in care fees and later-life planning. The Society of Later Life Advisers accredits advisers who are specialised in later-life planning and the financial needs of older people.
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