Who Pays for a Care Home? The Complete UK Funding Guide (2026)

Whether you pay for your own care home depends on a means test of your capital and income. If you have more than £23,250 in assets, you pay the full cost yourself. Below £14,250, the council pays. Between those thresholds, costs are shared. These rules apply across England — Scotland, Wales, and Northern Ireland have different systems.

The three funding tiers

| Tier | Capital | Who pays | Typical weekly cost (residential) | |---|---|---|---| | Self-funder | Above £23,250 | You pay everything | £1,000-1,400/week | | Partial funding | £14,250-£23,250 | Council contributes, you pay a "tariff income" | £200-500/week (your share) | | Council-funded | Below £14,250 | Council pays, you contribute from pension/income | Pension minus £24.90 personal allowance |

Tier 1: Self-funders (above £23,250)

If your total capital — savings, investments, and in most cases your property — exceeds £23,250, you are classified as a self-funder. This means:

• You pay the full cost of your care home place
• You choose your own home without council involvement
• You pay market rates, which are typically 20-40% higher than what councils pay for equivalent placements
• The council has no obligation to help you find or arrange care (though you can ask them to)

Self-funders make up around 45% of care home residents in England. They collectively pay billions more per year than they would at council rates — a cross-subsidy that keeps the system afloat.

For a detailed analysis, see the self-funding guide.

Tier 2: Partial funding (£14,250-£23,250)

If your capital falls between the lower and upper thresholds, you receive partial council funding. The calculation works like this:

1. For every £250 (or part of £250) of capital above £14,250, you are assumed to have a "tariff income" of £1 per week
2. This tariff income is added to your actual income (pension, benefits, etc.)
3. You pay the total of your actual income plus tariff income, minus a £24.90 personal expenses allowance
4. The council pays the rest

Example: You have £20,000 in savings. That is £5,750 above the lower threshold. Divided by £250 = 23 units. Your tariff income is £23/week, added to your pension income when calculating your contribution.

Tier 3: Council-funded (below £14,250)

If your capital is below £14,250, the council pays the full cost of your placement. However, you still contribute:

• All of your income (pension, benefits, etc.) goes towards the fee
• Minus a personal expenses allowance of £24.90/week, which you keep for personal spending
• The council pays the balance between your contribution and the home's fee

You do not get unlimited choice of home. The council will offer placements within their budget — typically £800-1,000/week. If you want a more expensive home, a third party (family member, friend) can pay a "top-up" to cover the difference.

Property rules: when your home counts

Your property is included in the means test unless:

• Your partner or spouse still lives there
• A dependent child under 18 lives there
• A relative aged 60 or over lives there
• A relative who is incapacitated lives there
• You have been in the care home for less than 12 weeks (the "12-week property disregard")

If none of these exemptions apply, the value of your home is counted as capital. For most homeowners, this pushes them above the £23,250 threshold and into self-funder territory.

The 12-week property disregard gives you breathing space. During the first 12 weeks of a permanent placement, your property is ignored in the means test. After that, it is counted in full.

The scrapped care cost cap

The previous Conservative government legislated an £86,000 lifetime cap on care costs, due to take effect in October 2025. The Labour government elected in 2024 cancelled the cap, describing it as unaffordable.

This means there is currently no limit on how much an individual can spend on care over their lifetime. A person in a care home for five years at £1,200/week will spend over £312,000 — with no cap and no state support if they started above the £23,250 threshold.

NHS Continuing Healthcare (CHC)

If your primary need for being in a care home is health-related rather than social care, you may qualify for NHS Continuing Healthcare. This is fully funded by the NHS — no means test, no contribution from you.

CHC covers:

• The full cost of a care home placement (including nursing homes)
• Or a package of care in your own home

Eligibility is assessed using a checklist and decision support tool that examines 12 "domains" of need (breathing, nutrition, cognition, behaviour, mobility, etc.). The threshold is high — you generally need a "severe" level of need in at least one domain or a combination of "high" needs.

Around 60,000 people in England receive CHC funding at any time. Many more are eligible but never assessed.

NHS-funded Nursing Care (FNC)

If you are in a nursing home (as opposed to a residential home), the NHS pays a flat-rate contribution towards the nursing element of your care, regardless of your financial position. This is called NHS-funded Nursing Care.

The current FNC rate is £219.71 per week (2025/26). This is paid directly to the care home, not to you. It reduces the amount you or the council must pay, but it does not cover the full fee.

FNC is non-means-tested. Even self-funders in nursing homes receive it.

Attendance Allowance

Attendance Allowance is a non-means-tested benefit for people over state pension age who need help with personal care. There are two rates:

| Rate | Weekly amount | Criteria | |---|---|---| | Lower rate | £68.10/week | Help needed during the day OR night | | Higher rate | £101.75/week | Help needed during the day AND night |

If you are a self-funder in a care home, you can claim Attendance Allowance and use it towards your fees. That is up to £5,291 per year off your care costs.

If you are council-funded, Attendance Allowance is taken into account as income in your financial assessment, so it does not provide additional spending money — but it does reduce the council's net contribution.

Deferred Payment Agreements

If you own your home and it is being counted in the means test, you do not have to sell it immediately. A Deferred Payment Agreement (DPA) allows you to:

• Defer the care costs secured against your property
• The council pays the care home
• The debt (plus interest and an administration charge) is repaid when the property is sold — either during your lifetime or from your estate

Interest is charged at a rate set by the government (currently around 3.6% per year). The council places a legal charge on the property.

DPAs are available from your local authority. They give you time to decide about selling your home without the pressure of immediate care home bills.

How to work out your position

1. Calculate your capital — add up savings, investments, and property value (if applicable)
2. Identify your income — state pension, private pension, any other regular income
3. Check exemptions — does a partner, child, or dependent relative live in your property?
4. Use the calculator — the care costs calculator can estimate your likely contribution
5. Request a financial assessment — your local council must carry out a formal assessment if you ask

For a full analysis of self-funder costs by council area, see the self-funding guide and care costs hub.