Funding Care Home Fees

The cost of care in England

Care home fees are one of the biggest financial commitments a family can face. In 2025/26, the average cost of a residential care home in England is approximately £800 to £1,200 per week. Nursing care — which includes qualified nurses on site — typically costs £1,000 to £1,500 per week or more, depending on the region and the complexity of needs.

These figures can feel overwhelming. But there are multiple ways to fund care, and most families use a combination. Understanding your options is the first step.

Local authority (council) funding

Your local council has a legal duty to arrange care for anyone assessed as needing it. The first step is requesting a needs assessment from your council's adult social care team. This is free, and anyone can request one regardless of their financial situation.

If the assessment confirms that the person needs residential care, the council will then carry out a financial assessment (sometimes called a means test) to determine how much the person must contribute.

The capital thresholds

• Above £23,250: You are considered a "self-funder" and will pay the full cost of your care. The council can still help arrange a placement if you ask.
• Between £14,250 and £23,250: You will contribute from your capital at a rate of £1 per week for every £250 above £14,250 (the "tariff income"), plus any income from pensions or benefits. The council covers the rest.
• Below £14,250: Your savings are largely disregarded. You contribute from your income only (usually pensions and benefits), and the council pays the remainder.

The 12-week property disregard

If the person entering care owns their home and it is empty (no spouse or dependent living there), the property is disregarded from the financial assessment for the first 12 weeks. This gives the family time to make decisions about selling or renting the property, or applying for a deferred payment agreement.

Self-funding

If your savings and assets (including property, in some cases) exceed £23,250, you will need to pay for care yourself. Self-funders often pay higher fees than council-funded residents — this is a common source of frustration, but it is currently legal.

As a self-funder, you have complete freedom to choose any registered care home. You can negotiate fees directly and are not limited by the council's usual rate. However, once your capital drops below £23,250, you can ask the council to reassess your funding.

NHS continuing healthcare (CHC)

If the person has a "primary health need" — meaning their care requirements are mainly due to a health condition rather than social care needs — they may qualify for NHS continuing healthcare. This is fully funded by the NHS, covering all care and accommodation costs.

CHC is not means-tested, so it does not matter how much money or property the person has. However, eligibility is strict and assessed through a detailed process:

1. Checklist: A screening tool completed by a healthcare professional to determine whether a full assessment is needed.
2. Decision Support Tool (DST): A comprehensive assessment by a multidisciplinary team, examining 12 care domains including breathing, cognition, behaviour, and mobility.
3. Panel decision: The local Clinical Commissioning Group reviews the DST and makes the funding decision.

If you believe your relative may qualify, ask their GP, hospital discharge team, or the care home to request a checklist assessment. You can also request one yourself through your local Integrated Care Board.

Funded Nursing Care (FNC)

Even if a person does not qualify for full CHC, anyone in a nursing home is entitled to a Funded Nursing Care contribution from the NHS. This is a flat-rate payment (currently £219.71 per week in 2025/26) that is paid directly to the nursing home to cover the cost of registered nursing care. It reduces what you need to pay, but does not cover the full fees.

Attendance Allowance

Attendance Allowance is a non-means-tested benefit for people aged 65 or over who need help with personal care due to a physical or mental disability. It is paid at two rates:

• Lower rate (£72.65/week): If you need help during the day or night.
• Higher rate (£108.55/week): If you need help both day and night.

Attendance Allowance is paid while the person is living at home or in a care home they fund themselves. However, it stops after 28 days if the person moves into a council-funded or NHS-funded care home. Many families overlook this benefit — if your relative is self-funding, make sure to apply.

Deferred payment agreements

If the person's main asset is their home, a deferred payment agreement allows you to delay selling it. The council pays the care fees and places a legal charge against the property. The debt — plus interest — is repaid when the property is sold or from the estate after death.

Deferred payments are not available everywhere under identical terms, and there are eligibility conditions. Speak to your local council's adult social care team to explore this option.

Getting financial advice

The financial landscape of care is complex, and mistakes can be costly. Consider speaking to a specialist later-life financial adviser — ideally one regulated by the Financial Conduct Authority and qualified with the Society of Later Life Advisers (SOLLA). They can help with:

• Structuring assets to fund care efficiently
• Immediate needs annuities (a lump sum that guarantees care fees for life)
• Tax implications of selling property
• Protecting a spouse's income and home

Many councils also have information and advice services, and charities such as Age UK and Independent Age offer free guidance.

You are not alone in this

Worrying about how to pay for care is one of the most stressful parts of this journey. But help is available, and you have more options than you might think. Start with a needs assessment from your council, explore every benefit and funding route, and do not hesitate to ask for professional advice. Your family deserves clarity — and peace of mind.

Frequently Asked Questions

What is the capital threshold for council-funded care?

In England (2025/26), if you have savings and assets above £23,250, your local council will not normally contribute to your care costs. Between £14,250 and £23,250, you will be expected to contribute from your capital but may receive partial council support. Below £14,250, your capital is largely disregarded. These thresholds are expected to change when the government implements the planned cap on care costs.

Is my home included in the financial assessment?

Your home is disregarded in the financial assessment if a spouse, partner, dependent child, or certain other dependants still live there. If the property is empty, it will be included in the assessment — but only after the first 12 weeks of a permanent care home placement, during which it is disregarded.

What is a deferred payment agreement?

A deferred payment agreement lets you delay selling your home to pay for care. The council pays your care fees and places a legal charge on your property. The debt is repaid when the property is eventually sold or from your estate. Interest is charged, and not all councils offer identical terms, so ask your local authority for details.

What is NHS continuing healthcare?

NHS continuing healthcare (CHC) is a package of care fully funded by the NHS for people with a "primary health need." It covers all care costs, including accommodation. Eligibility is assessed using the National Framework, which considers the nature, complexity, intensity, and unpredictability of the person's needs. It is not means-tested.

Can I top up my relative's council-funded care?

Yes, this is called a "first-party" or "third-party top-up." If the council will only fund care up to a set amount and you want a more expensive home, a family member (or the resident themselves in some cases) can pay the difference. The arrangement must be agreed with the council in writing.