This guide covers council-funded care in England under the Care Act 2014. It is general information, not financial or legal advice. For your specific circumstances, contact your local authority's financial assessment team or an adult social care adviser.
A council-funded care home resident does not hand over their entire pension. By law, they keep a guaranteed minimum every week for personal spending — for 2026/27, that figure is £31.80/week.
Here's the correction that matters just as much: this amount is fixed nationally and reviewed annually by the Department of Health and Social Care. It doesn't rise because a home is expensive, because a family is paying a top-up, or because a resident feels short-changed by how little is left. The Personal Expenses Allowance (PEA) is a statutory floor, not a lever anyone can pull to make an expensive placement more affordable.
This article is about council-funded (local authority-supported) residents specifically. Self-funders are treated differently — that's covered later on.
Our care home means test guide already walks through PEA as one line inside the full financial assessment. This article goes further into the question it doesn't answer in as much depth: whether PEA can ever be increased, and what happens to it once a top-up or self-funding is involved.
What the Personal Expenses Allowance actually is
PEA is made under sections 14 and 17 of the Care Act 2014, set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014, and uprated each year through the Department of Health and Social Care's annual local authority charging circular.
In practice, it's the minimum weekly amount a local authority must leave a care home resident for personal spending once their financial assessment is complete. It comes out of the resident's own income and is protected before the rest is counted as a contribution to care costs.
For 2026/27, the rate is £31.80/week — confirmed in RightCareHome's full current funding rates table and in the DHSC 2026/27 charging circular.
PEA is meant for personal items outside the care package the council has already arranged and paid for: toiletries, clothing, a haircut, phone credit, small gifts. It is not meant to cover anything already included in the contracted care.
It applies specifically to residents whose care is arranged and charged for by the local authority — not, in the same statutory sense, to full self-funders. That distinction matters enough to have its own section below.
How the rest of the income becomes a contribution to care costs
Without repeating the full walkthrough, the mechanism is this: assessable income (pension, other income, and tariff income from capital between the thresholds) minus PEA, minus any applicable disregards, leaves the resident's weekly contribution toward the cost of their care.
A short example makes the point. Tom has a State Pension of £180/week and no other income. He keeps his £31.80 PEA and contributes £148.20/week toward his care costs.
PEA is subtracted first, as a protected floor. That's why it can feel like almost everything else goes toward care — not because the council is being ungenerous case by case, but because a fixed national figure is applied the same way to every council-funded resident.
For the complete step-by-step calculation, including capital and tariff income, see our care home means test guide.
Why PEA can't be increased to offset high fees or a top-up
PEA is a fixed national minimum. It does not flex up because a particular home charges more, or because a family is topping up the fee to secure a pricier placement. A council can't authorise a higher PEA "to be fair" simply because a resident's chosen home costs more than the council's usual rate.
Top-up fees work through a completely separate mechanism: a third party pays the gap between the council's rate and the home's actual fee. That arrangement never touches, reduces, or increases the resident's PEA — the two are unconnected in law.
It would be inaccurate to leave it there, though. The Care and Support Statutory Guidance (Annex C: Treatment of income) gives local authorities discretion to set a higher-than-minimum PEA in specific individual circumstances. One example is where a resident needs to contribute toward maintaining a property that has been disregarded in their financial assessment (see our 12-week property disregard guide). Another is where leaving someone with only the statutory minimum would fail to meet an identified need.
This discretion is a needs-based, case-by-case decision the council makes. It is not something a family can request purely because a home's fees are high or a top-up is in place.
Does this apply if you're a self-funder or paying a top-up?
Full self-funders — those with savings or assets above the upper capital limit, paying the whole fee privately — aren't going through the local authority's charging framework in the way that produces a PEA figure. There's no council-calculated contribution, so there's no PEA line item to apply. They manage their own income and spending directly.
If a self-funder's savings fall towards the upper capital limit and the council becomes involved, they move into the means-tested system described above, and PEA then applies from that point.
If a family pays a top-up so a resident can be in a more expensive home while the council still funds the core placement, the resident is still council-funded for charging purposes — they keep their full PEA exactly as normal. The top-up isn't deducted from or added to PEA; it's a separate transaction between the third party and the home.
What to do if PEA isn't actually being protected
If you think the allowance isn't being passed on correctly, three steps help:
- Check the written financial assessment. It should show PEA as a named, separate deduction before the resident's contribution is calculated.
- Raise it with the council first, in writing. This applies whether a care home or appointee isn't passing the allowance to the resident, or the council's assessment doesn't show it at all — contact the council's financial assessment team directly.
- Escalate if unresolved. A charging decision like this can be taken to the Local Government and Social Care Ombudsman, which investigates complaints about council financial assessments and charging decisions specifically.
RightCareHome's Funding Report shows how much of a resident's income the council is likely to assess, what they'll be left with, and where a top-up might be needed — before a placement decision has to be made under pressure. You can also start with a free funding check.
Frequently Asked Questions
What is the Personal Expenses Allowance for 2026/27?
£31.80 per week. It's the minimum amount a council-funded care home resident must be left with for personal spending after their financial assessment, and it's reviewed every April by the Department of Health and Social Care.
Can a council increase PEA if a care home is more expensive than usual?
Not to offset the fee, no. PEA doesn't rise because a home costs more or because a top-up is being paid. Councils have narrow discretion to set a higher PEA for specific individual needs — such as maintaining a disregarded former home — but that's a needs-based decision, not a response to a home's price.
Does PEA apply to self-funders?
Not in the same way. PEA is a feature of the local authority's means-tested charging system. Full self-funders manage their own income directly; PEA only becomes relevant once someone moves into council-funded, means-tested care.
Does paying a top-up reduce or increase the resident's PEA?
No. A top-up is a separate payment from a third party to cover the gap between the council's rate and a pricier home's fee. It doesn't touch the resident's PEA calculation either way.
What can PEA actually be spent on?
Personal items only — toiletries, clothing, a haircut, phone costs, small gifts. It isn't meant to cover anything already included in the care package the council has arranged and paid for.
Sources
- Care and Support (Charging and Assessment of Resources) Regulations 2014 — the statutory basis for PEA
- DHSC: Social care charging for local authorities 2026 to 2027 — the source for the current £31.80/week rate
- Care and Support Statutory Guidance (Annex C: Treatment of income) — the basis for local authority discretion to raise PEA above the minimum