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Paying for a care home

Paying for residential care in a care home is expensive. There is some help available to meet the cost, but the care system can - unfortunately - be complicated and difficult to find your way through.

Some older people may be eligible for financial help from your local authority or, in certain circumstances, from the NHS.

Will the local authority pay for my care home fees?

If you are eligible for funding support, your local authority could pay some or most of the fees. Your local authority will carry out a care needs assessment which includes a financial assessment, called a means test, that looks at your income and savings.

The means test will assess whether you can afford to pay for your own care and whether you’re eligible for financial help from the council. 

How much will I have to pay for care?

Care home fees will vary depending on the area that you live in, the individual care home itself, plus your own personal financial circumstances.

Your local authority must calculate the cost of your care and how much you have to contribute from your resources. This figure must be realistic and allow you to access an appropriate local care home.

If all your eligible income is taken into account in your means-test, you must be left with an income of £24.90 per week. This is known as your Personal Expenses Allowance

If you have a significant healthcare need the NHS may contribute towards the cost of your care. If you’re eligible for NHS continuing healthcare, your care home placement will be free.

NHS continuing care

Find out if you qualify for NHS funding towards care

How could my finances and property affect my care home fees?

If your local authority carries out a care needs assessment and finds you need a care home place, they will do a means test.

This may take into account the value of your property, if you own one, as well as your income and savings.

Here’s how the means test for social care will look at your capital and how this will affect your care home fees.

Amount of your capital (your savings and property) What you will have to pay 
Over £23,250  You must pay full fees (known as being self-funding)
 Between £14,250 and £23,250  The local authority will pay for some of your care and you will contribute to the rest
 Less than £14,250  This will be ignored and won't be included in the means-test – the local authority will pay for your care. However they will still take your eligible income into account.

Certain types of income, such as money from certain disability benefits and pensions, may not be counted in the means test. This is the same for certain types of capital. All other income and capital can be taken into account.

Will I have to sell my home to pay for care?

Many people worry that they will have to sell their home to pay for social care. We have a page on how your property will be valued and in what situations it may not have to be included in the means test.

What if I give away some of my money?

You may think about giving away some of your savings, income or property to avoid paying likely care costs, and to give something to your relatives or charity, for example.

If the council thinks that you have done this to avoid paying care fees they may still assess you as if you still had the money or property that you have given away.

This is referred to as deprivation of assets.

Find out more about deprivation of assets

What if I run out of money?

If you are paying fees yourself (called self-funding) and your capital reaches less than £23,250, the local authority may assist with funding. You should request an assessment a few months before that happens as they will have to agree you need a care home.

They should arrange one as soon as possible so you don’t have to use up your capital below that amount.

How do I pay my part of the care fees?

Generally the local authority pays the full amount to the home and then collects the amount you need to pay from you.

This may be different if you are paying a ‘third party top-up fee', where you have chosen a care home that costs more than the local authority will pay for (see below).

Do I get a choice about which care home I live in?

If you are paying for your own care, you can choose which care home to live in.

If the local authority is paying some or all of your costs, you still have the right to choose your care home, although this is subject to certain conditions. This also applies to people who will fund their own residential care to start with, but may need local authority assistance with the fees later.

If you prefer a particular care home, the local authority must try to arrange accommodation in that home, as long as the following criteria are met:

  • the home chosen is suitable to meet your assessed needs
  • it doesn’t cost more than the local authority would expect for this type of accommodation
  • the provider is willing to enter into a contract on the local authority’s usual terms
  • the care home is within the UK.

See our page on finding a care home for more information

What if I prefer a more expensive care home than the local authority will pay for?

If you'd prefer to live in a care home that costs more than the local authority would usually expect to pay, it can arrange this, provided that someone else is willing to meet the difference in cost.

This is usually known as a third-party top-up.

What if I only need to stay in a care home temporarily?

Some people go into a care home on a temporary basis to give themselves or their carers a break‚ or while they are recuperating from an illness. Others enter a home temporarily for a ‘trial’ period to decide whether they want to live permanently in that home.

If you only need to stay in a care home for a little while, your fees will be calculated differently as it is presumed that you will return home.

A more detailed account of the charging rules can be found in our factsheet Paying for temporary care in a care home which you can download below. This factsheet is aimed at individuals aged 60 and over.

For more information download our factsheet Paying for short-term and temporary care in a care home (PDF 505 KB)

Further information

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All the information and advice we provide on the website is free and completely independent, as is our National Advice Line that is open 365 days a year.

But demand is going up. We are an ageing population and more people than ever are coming to us for support, which is why we need to ask for help.

If you are able to, just a small gift today could help us reach even more older people wherever the need is greatest.

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For more information call Age UK on 0800 055 6112


Last updated: Mar 23 2018

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