Paying for residential care
Paying for residential care in a care home is expensive. There is some help available to meet the cost, but the care system can be complicated and difficult to find your way through.
You may be eligible for financial help from your local council or, in some circumstances, from the NHS.
Will the local council pay for my care home fees?
If you are eligible for funding support, your local council could pay some or most of the fees. The council will carry out a care needs assessment. If this concludes you need care in a care home, they will carry out a means test to work out whether you qualify for help with the cost. This will look at your income and capital.
Where do I start in arranging care?
The first step to getting care, whether you need home adaptations, home care or a care home place, is to get a care needs assessment from your local council.
How much will I have to pay for care?
If you are eligible for funding support, your local council must calculate the overall cost of your care and, using the means test, how much you have to contribute to the overall cost from your financial resources. The council must ensure that the overall cost figure it calculates, called the ‘personal budget’, is high enough to meet the cost of at least one suitable care home.
You will be expected to pay towards the cost from your income included in the financial assessment, for example pensions, however you must be left a Personal Expenses Allowance (PEA). The PEA must be at least £24.90 per week. The council has discretion to increase this amount, depending on your circumstances. See below for more information about the means test.
If your needs are primarily health-based, the NHS arrange and pay for your care under NHS continuing healthcare (NHS CHC). If you are eligible for NHS CHC, your care home placement will be free. When assessing your needs, the council must refer you to the NHS if it appears you may be eligible for NHS CHC.
If you do not meet the criteria for NHS CHC, but require nursing care, the NHS pays a contribution towards the cost of the nursing care directly to the nursing home. This is called NHS-funded nursing care (NHS FNC). For more information see our factsheet on NHS Continuing Healthcare and NHS-funded nursing care.
NHS continuing healthcare
Find out if you qualify for NHS funding towards your care home fees
How could the level of finances affect how much I pay for my care?
If your local council carries out a care needs assessment and finds you need a care home place, they will do a means test to work out how much you must contribute towards the cost of your care. This will take into account your income and capital, e.g savings. Certain types of income, such as money from certain disability benefits, are ignored in the means test. This is the same for certain types of capital. All other income and capital can be taken into account.
The value of your property may be included as capital in means test. However, in certain circumstances, the council cannot include your property in the means test. See the information below.
Here’s how the means test for social care will look at your capital and how this will affect how much you pay for your care.
|Your capital||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||You contribute from income included in the means test, such as pensions, plus an assumed, or ‘tariff’ income based on your capital between £14,250 and £23,250. The council pay the remaining cost of your care.|
|Less than £14,250||You no longer pay a ‘tariff’ income based on your capital, but you must continue paying from income included in the means test. The council pay the remaining cost of your care.|
Will I have to sell my home to pay for care?
Find out how your property will be valued and in what situations it may not have to be included in the means test.
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We offer support through our free advice line on 0800 678 1602. Lines are open 8am-7pm, 365 days a year. We also have specialist advisers at over 140 local Age UKs.
Will costs of care vary by location?
Care home fees will vary depending on the area that you live in, the individual care home itself, plus your own personal financial circumstances. Costs average around £600 a week for a care home place and over £800 a week for a place in a nursing home. You can use this cost of care and eligibility in England tool to get an estimate for care costs in your area.
Research indicates that the average cost of residential care varies drastically depending on where in the UK you live, creating a postcode lottery for vulnerable people in need of care.
In 2016/7, the divide between counties in the North and South of England was as much as £230 a week in some cases. Perhaps unsurprisingly, London was found to be the most expensive region to obtain residential care, at a weighted average of £741 a week, whereas the North West was the least expensive at £511. Funding support may be available from your local council if you need help paying for your care.
Frequently asked questions
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.
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 council 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?
If you receive funding from your local council, generally the council pays the full amount to the home then collects the amount you need to pay from you.
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 council 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 council assistance with the fees later.
If you prefer a particular care home, the local council 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
- the provider is willing to enter into a contract on the local council's terms and conditions and there is a place available
- If the home costs more than the overall amount the council calculates is necessary to meet your needs, the ‘personal budget’, someone is willing and able to pay the extra cost through a ‘top-up’.
What if I prefer a more expensive care home than the local council will pay for?
If you'd prefer to live in a care home that costs more than the amount necessary to meet your needs, it can arrange this, provided that someone is willing and able to meet the difference in cost. This is usually paid by a third party, i.e. someone who knows you, and is called a ‘top-up’ fee. The council must not ask for a ‘top-up’ when you are in a more expensive home out of necessity rather than preference.
The council must show there is at least one suitable care home available at the overall amount it calculates as necessary to meet your needs – i.e. at least one suitable care home where no top-up is required.
What if I only need a short-term or temporary stay in a care home?
Some people go into a care home on a short-term or 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 are eligible for financial help from the council, your contribution towards the cost of your care will be calculated differently as it is presumed that you will return home - you must be allowed to keep enough income to maintain your home. The value of your home will be ignored as capital in the means test.
If you need a short-term stay in a care home to help you re-build your confidence and maximise your ability to live independently, for example following discharge from hospital, your care may be free under ‘intermediate care’. This can be provided by either the council or the NHS.
For more information
If you need any more detailed information on any of the above topics, visit other pages or download one of our factsheets