Self-Funding Care Home Guide UK 2026 — What You'll Actually Pay

If you have savings and assets above £23,250, you will pay the full cost of your care home yourself. Self-funders pay significantly more than councils do for the same bed. This guide explains the means test, what self-funders actually pay, and practical ways to reduce your costs.

Key facts for self-funders

Self-funders pay 20-40% more than the council rate for the same bed in the same care home
Capital threshold: £23,250 — above this you pay the full cost yourself. This threshold has been frozen since 2010
Your home IS counted in the means test if no partner or dependent relative still lives there
The planned £86,000 lifetime cap was scrapped by the Labour government — there is no cap on how much you can be required to spend

How the means test works

When you need care, your local authority carries out a financial assessment (means test) to decide how much you pay. The assessment looks at your capital (savings, investments, property) and your income (pension, benefits).

Capital level	What happens
Above £23,250	Full self-funder. You pay the entire cost yourself. The council has no obligation to arrange your care (though you can ask them to).
£14,250 - £23,250	Sliding scale. You pay a “tariff income” of £1 per week for every £250 of capital above £14,250, plus most of your income. The council pays the remainder.
Below £14,250	Council-funded. The council pays the assessed cost. You contribute most of your pension/income, keeping a Personal Expenses Allowance of £28.25/week.

Property disregard rules

12-week property disregard: When you first enter permanent residential care, the value of your home is ignored for the first 12 weeks. This gives you time to decide whether to sell, let, or apply for a deferred payment.
Deferred Payment Agreement (DPA): You can borrow from the council against the value of your home. The council places a legal charge on the property, and the debt (plus interest and admin fees) is repaid when the property is eventually sold.
Mandatory disregard: Your home is always disregarded if your partner, a dependent child under 18, or a relative aged 60+ or who is disabled still lives there.

What self-funders actually pay

Self-funders typically pay 20-40% more than the council rate for the same bed. The table below shows council median rates from NHS England data alongside estimated self-funder rates (council rate + 30%).

Service	Council median /week	Self-funder est. /week	Self-funder est. /year
Residential care home	£1,196	£1,555	£80,860
Nursing care home	£1,239	£1,611	£83,772
Residential and nursing care	£1,229	£1,598	£83,096
Short-term care	£56	£73	£3,796

Council median from NHS England ASC-FR data. Self-funder estimate is council rate x 1.30 — actual premiums vary by home and region.

How to reduce your care costs

Deferred Payment Agreements (DPA)

If most of your wealth is tied up in your home, a DPA lets you borrow from the council to pay care fees while deferring repayment until your property is sold (usually after death). The council places a legal charge on the property. Interest is charged (currently around 2-3%), plus a one-off admin fee. This avoids a forced sale during your lifetime. All councils in England are legally required to offer DPAs.

NHS Continuing Healthcare (CHC)

If your primary need is health-related (not social), you may qualify for NHS Continuing Healthcare. CHC is fully funded by the NHS with no means test — the NHS pays for everything including accommodation. Eligibility is assessed using a national Decision Support Tool scoring 12 care domains. Around 15% of applicants qualify. CHC can be worth over £1,000 per week, so it is always worth requesting a Checklist assessment from your local Integrated Care Board (ICB).

NHS-funded Nursing Care (FNC)

If you are in a nursing home but do not qualify for full CHC, you are entitled to NHS-funded Nursing Care — a flat-rate contribution of £219.71 per week towards the nursing element of your care. This is paid directly to the care home. It applies to all nursing home residents regardless of means and is separate from the means test.

Attendance Allowance

Attendance Allowance is a tax-free, non-means-tested benefit for people aged 65+ who need help with personal care due to physical or mental disability. The lower rate is £68.10 per week (daytime or night-time help) and the higher rate is £101.75 per week (day and night help, or terminal illness). It stops if you move into a council-funded care home, but self-funders can continue to claim it while in a care home.

Top-up payments

If you qualify for council funding but want a more expensive care home than the council will pay for, a third party (usually family) can pay a “top-up” to bridge the gap between the council rate and the home’s actual fee. The third party must sign a written agreement with the council. In some circumstances, you can also pay the top-up from your own resources (a “first-party top-up”), though councils may resist this.

The cross-subsidy problem

Councils negotiate bulk-purchase rates with care homes that are often below the actual cost of providing care. The Competition and Markets Authority (CMA) found in 2017 that council-funded rates are, on average, 10% below the true cost of care. Care homes make up the shortfall by charging self-funders more.

This means self-funders are effectively subsidising council-funded residents. A self-funder in the same room, receiving the same care, can pay £200-400 per week more than a council-funded resident next door.

The CMA recommended reforms to address this cross-subsidy, but successive governments have not acted. The planned lifetime cap (which would have narrowed the gap) was scrapped. Self-funders remain structurally disadvantaged.

Estimated self-funder cost by region

Average annual residential care cost by region, with estimated self-funder premium (council rate x 1.30). Based on NHS England ASC-FR data.

Region	Council avg /week	Council avg /year	Self-funder est. /year
South West	£1,612	£83,837	£108,988
South East	£1,425	£74,116	£96,351
Yorkshire & The Humber	£1,410	£73,315	£95,310
East of England	£1,409	£73,268	£95,248
London	£1,400	£72,781	£94,615
North East	£1,376	£71,552	£93,018
West Midlands	£1,361	£70,759	£91,987
East Midlands	£1,350	£70,207	£91,270
North West	£1,257	£65,388	£85,005

Regional averages computed from per-LA residential care costs in the NHS England ASC-FR dataset. Self-funder estimate = council rate x 1.30.

Frequently asked questions

Do I have to sell my house to pay for care?

Not necessarily. Your home is only counted in the means test if no partner, dependent relative (over 60), or disabled person still lives there. Even if it is counted, you can use a Deferred Payment Agreement (DPA) to borrow against the property and avoid an immediate sale. The council places a legal charge on the property, and the debt is repaid from the eventual sale proceeds after you die or leave care. You can also let the property to cover fees, though this affects your income assessment.

What happens when my money runs out?

When your capital falls below the upper threshold of £23,250, you should contact your local authority for a financial reassessment. The council will begin contributing to your care costs on a sliding scale. Below £14,250 in capital, the council pays the full assessed cost (though you still contribute most of your pension income, keeping a Personal Expenses Allowance of £28.25 per week). You do not have to leave your care home, but the council may only fund up to its standard rate — if your home charges more, a third party (usually family) may need to pay a top-up.

Can I give away my assets before going into care?

Councils have powers to investigate "deliberate deprivation of assets" — giving away money, property, or possessions to reduce your assessed wealth and qualify for council funding. If the council decides you deliberately deprived yourself of assets, it can assess you as if you still own them. There is no fixed time limit on how far back the council can look, though transfers made years before care was needed are harder to challenge. Gifting assets to avoid care fees is a high-risk strategy with no guaranteed protection.

Is the £86,000 cap still happening?

No. The planned £86,000 lifetime cap on personal care costs was originally proposed in the 2014 Care Act and rescheduled to October 2025, but was postponed indefinitely by the Conservative government in 2022, then formally scrapped by the Labour government in 2025. There is currently no cap on how much you can be required to spend on care in your lifetime. The means test thresholds (£23,250 upper, £14,250 lower) also remain frozen at levels set in 2010.

What is NHS Continuing Healthcare?

NHS Continuing Healthcare (CHC) is a package of care funded entirely by the NHS for people with a "primary health need" — meaning your care needs are mainly health-related rather than social. If you qualify, the NHS pays for all your care (including accommodation in a care home) with no means test. Eligibility is assessed using a national framework called the Decision Support Tool, which scores 12 care domains. Only around 15% of applicants are found eligible. CHC can be worth £1,000+ per week, so it is always worth requesting an assessment.

All care costs Costs by region Healthcare finance

Sources & further reading

NHS England - Adult Social Care Activity and Finance Report (ASC-FR) — Per-local-authority adult social care unit costs
DHSC - Care and support statutory guidance (Care Act 2014) — Means test thresholds, DPA, charging rules
CMA - Care homes market study (2017) — Cross-subsidy between self-funders and council-funded residents
NHS England - NHS-funded nursing care — FNC rate of £219.71/week
GOV.UK - Attendance Allowance — Attendance Allowance rates and eligibility

Data source: NHS England Adult Social Care Activity and Finance Report (ASC-FR). Cost comparisons use the national median council rate with a 30% self-funder premium applied. Actual self-funder fees vary by home, region, and room type. Policy information current as of April 2026.