Quick answer
The Personal Expenses Allowance (PEA) is the minimum amount of weekly income a person paying for UK care from their income must be left with for personal spending — typically £30.65 per week in 2025/26 (the figure changes annually with the local authority financial circular). The PEA covers small personal items the local authority doesn’t pay for: toiletries, sweets, magazines, gifts to grandchildren, hairdressing, telephone calls. It is intentionally modest because the rest of the resident’s needs are met by the care home. The local authority cannot reduce a resident’s contribution below the PEA. The PEA is supplemented by the higher Savings Disregard for some pensioners. This guide explains the 2026 Personal Expenses Allowance, how it interacts with the means test, what it actually covers in practice, and how to challenge a local authority that pushes the contribution below the statutory minimum.
Last reviewed: 24 May 2026 by the MP Estate Planning editorial team. Jurisdiction: England and Wales. Scotland and Northern Ireland have different probate and intestacy rules; the IHT thresholds are UK-wide.
When planning for care in the UK, understanding the Personal Expenses Allowance is crucial. We help you navigate the complexities of care planning, ensuring that you and your loved ones are financially prepared.
The Personal Expenses Allowance is a vital component of financial management in care homes, allowing residents to cover their personal needs. We provide clear guidance on how this allowance works and its benefits, empowering you to make informed decisions about your care.
Key Takeaways
- Understanding the role of Personal Expenses Allowance in care planning
- Managing finances effectively in UK care homes
- The importance of financial planning advice in care decisions
- Navigating the complexities of care funding in the UK
- Ensuring financial preparedness for care needs
Understanding Personal Expenses Allowance in the UK
When planning for care in the UK, understanding the Personal Expenses Allowance is crucial for effective financial management. This allowance is a critical aspect of care planning, ensuring that individuals in care homes have some income left for personal expenses.
Definition of Personal Expenses Allowance
The Personal Expenses Allowance is an amount that is disregarded from a care home resident’s income when paying care home fees. This means that the individual retains this amount for their personal use, such as buying clothing, entertainment, or other personal items. It is an essential component of managing finances in the UK, as it allows individuals to maintain some level of financial independence.
- Ensures financial independence for care home residents
- Allows for personal expenses such as clothing and entertainment
- Is a disregarded amount when calculating care home fees
Who is Eligible for This Allowance?
Eligibility for the Personal Expenses Allowance includes being a care home resident with care arranged by the local authority. The specific eligibility criteria may vary, but generally, it applies to those whose care is funded or arranged by the local authority. Understanding these criteria is vital for personal budgeting tips and ensuring that one maximizes their entitlement.
- Care home residents
- Care arranged by the local authority
- Meets specific eligibility criteria set by local authorities
Importance in Care Planning
The Personal Expenses Allowance is significant in care planning as it ensures that individuals have some financial autonomy. It allows them to make choices about how they spend their money, contributing to their overall well-being and dignity. Effective care planning involves understanding and utilizing this allowance to support the individual’s needs and preferences.
By understanding the Personal Expenses Allowance, individuals and their families can better navigate the complexities of care funding in the UK. It’s a crucial aspect of ensuring that care is both affordable and tailored to the individual’s needs.
The Role of Personal Expenses in Care Funding
When it comes to care funding, Personal Expenses Allowance is a critical factor that affects both care costs and state benefits. We will explore how this allowance influences care funding and why it’s essential for planning future care needs.
How Personal Expenses Affect Care Costs
Personal Expenses Allowance directly impacts the amount of money an individual has available for care costs. By retaining a certain amount for personal expenses, individuals can better manage their care-related expenditures. This allowance can be used to cover various expenses, such as:
- Daily living costs
- Care home fees
- Other care-related expenses
Using budget planner tools can help individuals allocate their Personal Expenses Allowance effectively, ensuring they have sufficient funds for their care needs. By doing so, they can reduce their overall expenses and make the most of their available resources.
Interaction with State Benefits
Personal Expenses Allowance also interacts with state benefits, affecting the overall financial situation of individuals receiving care. Understanding this interaction is crucial for maximizing the benefits and minimizing potential losses.
For instance, when calculating entitlement to certain state benefits, the amount retained for Personal Expenses Allowance is taken into account. This can impact the overall benefit amount an individual is eligible for.
| State Benefit | Interaction with Personal Expenses Allowance | Impact on Overall Benefit |
|---|---|---|
| Attendance Allowance | Not affected by Personal Expenses Allowance | No impact |
| Income-based benefits | Affected by Personal Expenses Allowance | Potential reduction |
Planning for Future Care Needs
Planning for future care needs is essential, and Personal Expenses Allowance plays a significant role in this process. By understanding how to utilize this allowance effectively, individuals can better prepare for their future care costs.
Using reducing expenses in the UK strategies, individuals can minimize their care costs and maximize their Personal Expenses Allowance. This can involve various approaches, such as:
- Optimizing care funding options
- Managing daily expenses
- Exploring available benefits and allowances
Setting Up a Personal Expenses Allowance
When it comes to managing care costs in the UK, setting up a Personal Expenses Allowance is essential. This allowance is a vital component of care planning, enabling individuals to maintain a level of financial independence and personal dignity.
Steps to Establish an Allowance
To establish a Personal Expenses Allowance, follow these steps:
- Assess your financial situation to determine how much you can allocate towards personal expenses.
- Gather necessary financial documents, including income statements and expenditure records.
- Consult with a financial advisor or care planning expert to determine the appropriate allowance amount.
- Regularly review and adjust your allowance as your financial situation changes.
As emphasized by a leading care planning expert, “A well-planned Personal Expenses Allowance can significantly enhance an individual’s quality of life.”
“Having control over one’s finances is crucial for maintaining independence and dignity in care settings.”
Documentation Needed
The following documentation is typically required to set up a Personal Expenses Allowance:
| Document Type | Description |
|---|---|
| Income Statements | Records of all income sources, including pensions and benefits. |
| Expenditure Records | Details of regular outgoings, such as bills and living expenses. |
| Care Assessment Reports | Official assessments of care needs and associated costs. |
Common Mistakes to Avoid
When setting up a Personal Expenses Allowance, it’s crucial to avoid common pitfalls, such as:
- Underestimating expenses, leading to insufficient funds for personal needs.
- Failing to regularly review and adjust the allowance.
- Not seeking professional advice when determining the allowance amount.
Effective financial planning resources can help mitigate these risks. By understanding UK spending limits and how they apply to your situation, you can better manage your care costs.
By carefully setting up a Personal Expenses Allowance and avoiding common mistakes, individuals can ensure they have the necessary financial resources to maintain their dignity and independence in care settings.
Impact of Personal Expenses on Individuals
Personal Expenses Allowance significantly influences the financial independence and dignity of individuals receiving care. This allowance is not just a financial provision; it’s a means to ensure that individuals maintain a level of autonomy and respect in their care journey.
Financial Independence and Personal Dignity
The Personal Expenses Allowance enables individuals to cover personal expenses that are not directly related to their care costs, thereby supporting their financial independence. This independence is crucial for maintaining personal dignity, as it allows individuals to make choices about their own lives, such as purchasing personal items or participating in social activities.
For instance, having a Personal Expenses Allowance can mean that an individual can afford to buy their own clothing or toiletries, rather than relying on others. This simple act can significantly boost their self-esteem and overall sense of well-being.
Relationship with Carers
The Personal Expenses Allowance can also affect an individual’s relationship with their carers. When individuals have some financial independence, they are more likely to feel respected and valued by their carers. This mutual respect can lead to a more positive and supportive care environment.
Moreover, having a Personal Expenses Allowance can reduce potential conflicts between individuals and their carers regarding financial matters. It allows individuals to make small purchases or gifts for their carers, fostering a more positive and reciprocal relationship.
Supporting Emotional Well-Being
Emotional well-being is a critical aspect of an individual’s overall health, and the Personal Expenses Allowance can play a significant role in supporting this. By enabling individuals to participate in activities they enjoy or to purchase items that bring them joy, the allowance can help maintain their emotional health.
For example, an individual might use their Personal Expenses Allowance to attend a local event or to buy a hobby kit. Such activities can provide a sense of purpose and happiness, contributing to their overall well-being.
| Aspect of Care | Impact of Personal Expenses Allowance |
|---|---|
| Financial Independence | Enhances autonomy and decision-making |
| Relationship with Carers | Fosters respect and positive interactions |
| Emotional Well-being | Supports participation in enjoyable activities |
In conclusion, the Personal Expenses Allowance has a multifaceted impact on individuals receiving care, influencing their financial independence, relationships with carers, and emotional well-being. By understanding and effectively utilizing this allowance, individuals can enhance their quality of life and maintain their dignity.
Personal Expenses & Tax Implications
Three rule changes you may need to consider (2026/27)
1. Pensions become subject to IHT from 6 April 2027. Most unused defined-contribution pension pots currently sit outside the estate for IHT — that ends on 6 April 2027 (gov.uk policy paper). HMRC estimates around 10,500 estates will face IHT for the first time as a result.
2. Business and agricultural property reliefs capped at £2.5m per person from 6 April 2026. Above the cap, only 50% relief applies — effective IHT of 20%. AIM shares dropped to 50% relief and do not use the £2.5m allowance (Saffery — APR/BPR reforms).
3. The NRB, RNRB and £2m taper threshold are frozen until 5 April 2031 following the 2024 and 2025 Budgets (gov.uk — NRB and RNRB freeze). With inflation, more estates will be pulled into IHT each year — a process commonly called “fiscal drag.”
In the UK, the tax treatment of Personal Expenses Allowance is a vital aspect of care planning that requires careful consideration. As we navigate the complexities of care funding, understanding the tax implications can significantly impact financial decisions.
Tax Treatment of Personal Expenses Allowance
The Personal Expenses Allowance is generally not considered taxable income. However, it’s essential to understand how it interacts with other income sources and benefits. outside the scope of IHT allowances can provide significant benefits, but the rules surrounding them can be complex.
For instance, if an individual receives state benefits, their Personal Expenses Allowance might not affect their tax liability directly. Nonetheless, it’s crucial to consider the overall financial situation to optimize tax efficiency.
Reporting Requirements
Reporting requirements for Personal Expenses Allowance involve notifying the relevant authorities about the allowance and potentially completing tax returns. It’s vital to maintain accurate records to ensure compliance with HMRC regulations.
- Keep detailed records of expenses and allowances.
- Understand the deadlines for tax returns and payments.
- Consult with a tax professional if unsure about reporting requirements.
Understanding Tax Reliefs
Tax reliefs can provide significant savings for individuals receiving Personal Expenses Allowance. Understanding the available reliefs and how to claim them is crucial for maximizing financial benefits.
| Tax Relief | Description | Eligibility |
|---|---|---|
| Marriage Allowance | Transferable allowance between spouses | Married couples or civil partners |
| Blind Person’s Allowance | Additional allowance for registered blind individuals | Registered blind or severely sight-impaired individuals |
| Married Couple’s Allowance | Allowance for couples where one spouse was born before 6 April 1935 | Couples meeting specific birthdate criteria |
By understanding the tax implications, reporting requirements, and available tax reliefs, individuals can better manage their Personal Expenses Allowance and make informed decisions about their care funding.
Budgeting Your Personal Expenses
In the context of UK care planning, budgeting for personal expenses is not just about saving money; it’s about maintaining dignity and independence. Effective budgeting allows individuals to manage their finances better, ensuring they can afford the care they need while maintaining some level of financial independence.
Creating a Personal Expenses Budget
To create a personal expenses budget, start by tracking your income and expenses. This will give you a clear picture of where your money is going. We recommend categorizing your expenses into needs (such as care costs, housing, and food) and wants (such as entertainment and hobbies).
- Identify your income sources
- List all your monthly expenses
- Categorize expenses into needs and wants
- Set financial goals, such as saving for future care needs
Tools and Resources for Budgeting
There are numerous tools and resources available to help with budgeting. Budget planner tools can simplify the process, making it easier to track expenses and stay on top of finances. Some popular options include:
| Tool | Description | Cost |
|---|---|---|
| Money Dashboard | A comprehensive budgeting app | Free |
| YNAB (You Need a Budget) | A budgeting tool that helps manage expenses | £6.99/month |
| Excel Budget Templates | Customizable spreadsheets for budgeting | Free (with Microsoft Excel) |
Reviewing and Adjusting Your Budget
Creating a budget is not a one-time task; it requires regular review and adjustment. We suggest reviewing your budget quarterly to ensure you’re on track with your financial goals. Adjustments may be necessary due to changes in income, expenses, or care needs.
Regular budget reviews can help identify areas where you can cut back and allocate funds more effectively. It’s also an opportunity to assess whether your current budget aligns with your long-term care planning goals.
Variations in Personal Expenses Allowance
Regional disparities in Personal Expenses Allowance highlight the need for tailored care planning strategies across the UK. The allowance is not uniform and varies significantly depending on the region and type of care required.
Differences Across the UK Regions
The UK is divided into different regions, each with its own set of rules and allowances regarding Personal Expenses. For instance, the allowance in England might differ from that in Scotland or Wales. According to the latest government guidelines, local authorities have some discretion in determining the level of Personal Expenses Allowance, leading to regional variations.
These variations can be significant, and understanding them is crucial for effective care planning. For example, some regions may offer a higher allowance for individuals receiving care at home, while others may provide more generous allowances for those in residential care.
Specific Allowances for Different Care Types
The type of care received also influences the Personal Expenses Allowance. Different care types, such as residential care, home care, or specialized care for conditions like dementia, may have different allowance rates. It’s essential to understand these differences to ensure that individuals receive the appropriate level of support.
- Residential care: Often has a different allowance rate compared to home care.
- Specialized care: May receive additional allowances due to the specific needs of the care required.
- Home care: Allowance rates can vary based on the level of care needed and the region.
Influencing Factors
Several factors influence the Personal Expenses Allowance, including the individual’s financial situation, the type of care they require, and the region in which they live. Local authorities play a significant role in determining these allowances, and their decisions can be influenced by various factors, including government policies and available funding.
As noted by a care planning expert, “The key to maximizing Personal Expenses Allowance is understanding the local rules and regulations and how they apply to an individual’s specific circumstances.”
“The flexibility in determining Personal Expenses Allowance allows local authorities to tailor their support to the specific needs of their communities.”
By understanding these variations and the factors that influence them, individuals and their families can better navigate the complex landscape of Personal Expenses Allowance and ensure they receive the support they need.
Case Studies: Real-Life Applications
Real-life applications of Personal Expenses Allowance in care settings provide valuable insights into its benefits and challenges. By examining specific scenarios, we can better understand how this allowance supports individuals in need of care.
Successful Implementation in Care Settings
We’ve observed several instances where Personal Expenses Allowance has been successfully integrated into care plans, enhancing the quality of life for recipients. For example, one case study involved an elderly individual who used their allowance to personalize their care home experience, purchasing items that improved their daily living conditions.
Another successful implementation was seen in a community care setting, where the allowance enabled individuals to participate in social activities, thereby improving their mental and emotional well-being.
Lessons Learned from Different Scenarios
Through these case studies, we’ve learned that flexibility and personalized planning are key to the successful implementation of Personal Expenses Allowance. It’s crucial to assess the individual needs of care recipients and tailor the allowance accordingly.
We’ve also identified that clear communication between care providers, recipients, and family members is essential to avoid misunderstandings and ensure that the allowance is used effectively.
Some of the key takeaways from our analysis include:
- The importance of tailoring the allowance to individual needs.
- The need for clear and ongoing communication among all parties involved.
- The benefits of using the allowance to enhance the quality of life and promote independence.
By understanding these lessons, care providers and recipients can better navigate the complexities of Personal Expenses Allowance, ultimately leading to more effective and personalized care.
Challenges in Managing Personal Expenses
Individuals receiving Personal Expenses Allowance frequently encounter difficulties in managing their finances effectively. The complexities involved in budgeting, coupled with the need to make the most out of their allowance, can be overwhelming.
Common Challenges Faced by Recipients
Recipients of Personal Expenses Allowance often face several common challenges. These include:
- Difficulty in budgeting for variable expenses
- Limited financial literacy
- Insufficient funds to cover all personal needs
- Complexities in navigating the benefits system
These challenges can significantly impact the well-being of individuals, making it essential to address them proactively.
Strategies to Overcome Financial Barriers
To overcome the financial barriers associated with managing personal expenses, several strategies can be employed. These include:
- Creating a detailed budget that accounts for all expenses
- Seeking financial advice from professionals
- Utilizing available support services and resources
- Regularly reviewing and adjusting financial plans
By adopting these strategies, individuals can better manage their personal expenses and improve their financial stability.
| Challenge | Strategy to Overcome |
|---|---|
| Difficulty in budgeting | Create a detailed budget |
| Limited financial literacy | Seek financial advice |
| Insufficient funds | Utilize support services |
By understanding the common challenges and implementing effective strategies, individuals can enhance their ability to manage personal expenses, thereby improving their overall quality of life.
Future of Personal Expenses Allowance in the UK
We are on the cusp of a new era for Personal Expenses Allowance, driven by proposed policy changes. As we look to the future, it’s essential to understand the potential reforms and their implications for care planning and financial management in the UK.
Proposed Reforms and Changes
Recent discussions have highlighted several key areas where Personal Expenses Allowance could be reformed. These include:
- Increasing the allowance to better reflect the rising costs of care
- Simplifying the application process to reduce bureaucracy
- Introducing more flexible rules to accommodate different care needs
Such changes aim to make the system more equitable and user-friendly. For instance, increasing the allowance could significantly impact the quality of life for those in care, enabling them to afford better services and support.
Predictions for Policy Developments
Looking ahead, we predict that policy developments will focus on integrating Personal Expenses Allowance with other care funding mechanisms. This could involve:
- Streamlining benefits to reduce complexity
- Enhancing support for carers and those with specific care needs
- Implementing more robust assessment processes
The potential impact of these changes is significant. To illustrate, let’s consider a comparative analysis of the current system versus the proposed reforms:
| Aspect | Current System | Proposed Reforms |
|---|---|---|
| Allowance Amount | Fixed rate | Dynamic, based on care costs |
| Application Process | Bureaucratic, lengthy | Simplified, faster |
| Flexibility | Limited options | More flexible, tailored to needs |
As these reforms take shape, it’s crucial for individuals and families to stay informed. By understanding the future developments and proposed reforms, we can better navigate the evolving landscape of Personal Expenses Allowance in the UK.
Conclusion: Enhancing Care with Personal Expenses Allowance
As we have explored in this article, Personal Expenses Allowance plays a vital role in enhancing care and supporting care planning practices in the UK. By understanding the intricacies of this allowance, individuals can better navigate the complexities of care funding and ensure they receive the support they need.
Key Takeaways
The key points to consider are the eligibility criteria, the impact on care costs, and the tax implications of Personal Expenses Allowance. By grasping these elements, individuals can make informed decisions about their care planning.
Better Care Planning
Effective care planning practices involve not only understanding Personal Expenses Allowance but also leveraging it to achieve financial independence and personal dignity. By doing so, individuals can maintain a better quality of life and ensure that their care needs are met.
In conclusion, Personal Expenses Allowance is a crucial aspect of care planning in the UK. By summarizing the key points and encouraging better care planning practices, we can empower individuals to take control of their care and make informed decisions about their future.
FAQ
What is a Personal Expenses Allowance?
A Personal Expenses Allowance is a weekly amount that care home residents can keep for their personal expenses, such as toiletries, clothing, and leisure activities, while the rest of their income goes towards their care costs.
How much is the Personal Expenses Allowance in the UK?
The Personal Expenses Allowance is typically set at £24.90 per week, although this amount may be subject to change, and some councils or care providers may have different rates.
Who is eligible for a Personal Expenses Allowance?
Individuals who are receiving care or support in a care home or other care settings and are having their care costs met or contributed to by the local authority or through other funding arrangements are typically eligible.
How does Personal Expenses Allowance affect care costs?
The Personal Expenses Allowance is deducted from an individual’s income before their care costs are met, ensuring they have some money for personal expenses while the rest of their income goes towards their care.
Can I use budgeting tools to manage my Personal Expenses Allowance?
Yes, there are various budgeting tools and resources available, such as budgeting apps like Money Dashboard or YNAB (You Need a Budget), that can help you manage your Personal Expenses Allowance effectively.
Are there any tax implications for Personal Expenses Allowance?
Generally, Personal Expenses Allowance is not subject to income tax, but it’s essential to consult with a tax advisor to understand any potential tax implications or reliefs available.
How can I plan for future care needs using Personal Expenses Allowance?
Planning for future care needs involves understanding your care costs, assessing your income and assets, and considering how your Personal Expenses Allowance will be affected, to ensure you have sufficient funds for both care costs and personal expenses.
Are there regional variations in Personal Expenses Allowance across the UK?
Yes, different regions or councils within the UK may have varying rates or rules regarding Personal Expenses Allowance, so it’s crucial to check with your local authority for specific guidance.
What are the common challenges faced by individuals managing their Personal Expenses Allowance?
Common challenges include managing limited funds, understanding the rules and regulations surrounding the allowance, and balancing personal expenses with care costs, which can be mitigated by seeking advice from financial advisors or care experts.
How can I review and adjust my Personal Expenses budget?
Regularly reviewing your budget involves tracking your income and expenses, identifying areas for adjustment, and making changes as needed to ensure you’re managing your Personal Expenses Allowance effectively, using tools like budgeting apps or spreadsheets can be helpful.
Current Personal Expenses Allowance Rates and Annual Uprating
One of the most frequently searched questions in care planning is surprisingly straightforward to answer, yet rarely addressed clearly in a single place. The standard Personal Expenses Allowance (PEA) in England for 2025/26 is £30.15 per week. This figure is set by the Secretary of State and is typically uprated each April in line with the Department of Health and Social Care’s annual review. For 2026/27, any revised rate will generally be confirmed by the government ahead of the new financial year, and families should check the Charging for Residential Accommodation Guide (CRAG) published on GOV.UK for the latest confirmed figures.
How the PEA Rate Is Uprated Each Year
The PEA is not automatically linked to inflation or any single index. In practice, it has historically lagged behind the cost of living, meaning its real-terms value may erode over time. Local authorities in England are legally required to leave residents with at least £30.15 per week from their income after care home charges have been met. They cannot reduce this amount, though they may in some circumstances top it up. In Wales, the equivalent protected personal allowance operates under a separate charging framework — notably, Wales also applies a lower upper capital limit of £10,000 compared to £23,250 in England, a distinction that can materially affect how much of a resident’s assets are taken into account when local authority funding is assessed.
Why the PEA Matters in an Estate Planning Context
From an estate planning perspective, the PEA is not simply a welfare provision — it is a legally protected income floor that interacts directly with the capital threshold rules. A resident whose savings fall below £23,250 (in England) may become eligible for local authority funding support, but the PEA remains ring-fenced regardless of capital position. In our experience, families are sometimes unaware that an attorney acting under a Lasting Power of Attorney (LPA) for Property and Financial Affairs has a duty to preserve this allowance for the resident’s personal use rather than redirecting it toward care fees or family expenses. Mismanagement of PEA — even well-intentioned — can in some cases raise questions about whether a financial duty of care has been met. We would always encourage attorneys to seek guidance from a regulated professional, such as a solicitor or regulated financial adviser, before making decisions that affect a resident’s protected income.
The Staying Put Allowance: A Separate but Related Payment
The Staying Put arrangement is sometimes confused with the PEA but serves an entirely different purpose. Staying Put is a government-funded scheme that allows young people leaving foster care to remain with their former foster carer beyond the age of 18, typically up to age 21 (or 25 in some cases where the young person is in education). Foster carers who provide Staying Put arrangements generally receive a payment from their local authority to cover the costs of the young person remaining in the household. The rate varies by local authority but is typically intended to cover accommodation and living costs rather than to constitute taxable income in the conventional sense. Families and carers exploring Staying Put payments should confirm the current rate with their local authority, as there is no single nationally fixed amount equivalent to the PEA. The interaction between Staying Put payments and the carer’s own tax position may depend on individual circumstances, and we would recommend seeking advice from an accountant or tax adviser familiar with care arrangements.
Common Questions About Personal Expenses Allowance and Care Funding
How much allowance do you get in a care home?
In England, the law requires that local authorities leave care home residents with a minimum of £30.15 per week as their Personal Expenses Allowance for 2025/26. This amount is intended to cover personal items such as toiletries, clothing, newspapers, and social activities — costs that fall outside what the care home is funded to provide. The allowance is protected regardless of how a resident’s overall care package is funded, meaning it cannot be absorbed into care fees by the local authority or, in most cases, by an attorney acting under an LPA.
How much money can you keep if you are in a care home?
This question typically relates to the capital thresholds that determine local authority funding eligibility rather than the PEA itself. In England, if a resident’s capital (including savings and, in many cases, property) exceeds £23,250, they are generally expected to fund their own care in full. Once capital falls below this upper threshold, the local authority may contribute, and below £14,250 capital is disregarded entirely for contribution purposes. In Wales, the upper capital limit is considerably lower at £10,000, meaning Welsh residents may become eligible for local authority support at an earlier stage. These figures are subject to periodic review and residents should verify the current thresholds via the Care and Support Statutory Guidance on GOV.UK. Separately, the £30.15 weekly PEA is always retained by the resident in addition to whatever funding arrangement applies.
How does Staying Put work?
The Staying Put scheme allows eligible young people who have been in foster care to continue living with their foster carer after turning 18. The arrangement is voluntary for both the young person and the carer, and participating local authorities provide the carer with a financial contribution — the Staying Put allowance — to help meet the ongoing costs. The precise amount varies between authorities. Staying Put is distinct from formal foster care in that the young person is no longer looked after by the local authority, which has implications for both the carer’s payment arrangements and the young person’s access to leaving-care support services.
How much do you get for staying put?
There is no single nationally fixed Staying Put rate in England. Local authorities set their own payment levels, though guidance encourages rates that reflect the reasonable costs of the arrangement. Separately, foster carers more broadly benefit from Qualifying Care Relief, a tax exemption administered by HMRC that currently provides an annual threshold of £18,900 per household (for 2024/25), above which foster care receipts may become liable to income tax. Staying Put payments may fall within a similar relief framework depending on individual circumstances, but this is an area where the interaction between local authority payments and HMRC rules can be nuanced. We would recommend that carers review HMRC’s guidance on Qualifying Care Relief (HS236) and, where appropriate, take advice from an accountant.
How do personal allowances work?
In the context of care planning, the Personal Expenses Allowance works as a protected floor of income. After a local authority has assessed a resident’s financial contribution toward their care costs, it must ensure the resident retains at least the statutory minimum — currently £30.15 per week in England — for their own personal use. This amount is separate from any income tax personal allowance and should not be confused with it. From an estate planning perspective, it is worth noting that PEA spending on genuine personal items is generally considered ordinary expenditure from income and is unlikely in itself to raise deprivation of assets concerns. However, families managing a relative’s finances under an LPA may find it helpful to maintain clear records of how the PEA has been spent, in order to demonstrate — if ever questioned by the local authority — that the funds were used appropriately for the resident’s personal benefit rather than redirected elsewhere.