Care home costs
In this article
- How are care homes paid for?
- How much are care home fees across the UK?
- How do care homes structure their fees?
- Will your local authority help pay your care home fees?
- Will you get to choose your care home?
- When will the NHS cover the cost of a care home?
- Will you have to pay care home fees yourself?
- What if you can't afford care home fees?
How are care homes paid for?
There are over 400,000 people in the UK living in residential care homes and nursing homes. Of these, almost half pay for care themselves and the rest are supported, either wholly or partly, by their local authority or the NHS.
Care homes can be paid for in the following ways:
- Local authority funding: the local authority funds some or all of the care. A relative or friend of a resident can also contribute an additional voluntary payment, known as a top-up fee.
- Self-funding: the person being cared for (or their family or a friend) pays all the costs of their care.
- NHS funding: in some circumstances the NHS will cover the cost of the care.
We explain these options in more detail below.
How much are care home fees across the UK?
Care home fees across the UK are something of a postcode lottery.
For example, the average cost of a residential care home for someone paying for care without the help of a local authority or the NHS in March 2024 ranged from £1,035 a week in the North East of England to £1,383 in London, according to care home marketplace Lottie. That's a difference of £269 a week, or almost £14,000 a year.
The average cost of a care home for a self-funder in August 2024
| Region | Residential costs per week | Nursing costs per week | Residential dementia costs per week | Nursing dementia costs per week | Residential respite costs per week |
|---|---|---|---|---|---|
| East Midlands | £1,088 | £1,336 | £1,131 | £1,360 | £1,135 |
| East of England | £1,222 | £1,470 | £1,311 | £1,551 | £1,292 |
| London | £1,383 | £1,607 | £1,469 | £1,702 | £1,470 |
| North East England | £1,035 | £1,088 | £1,061 | £1,099 | £1,078 |
| North West England | £1,107 | £1,325 | £1,162 | £1,368 | £1,198 |
| South East England | £1,332 | £1,570 | £1,410 | £1,645 | £1,446 |
| South West England | £1,261 | £1,493 | £1,322 | £1,555 | £1,345 |
Source: Lottie, from over 4,000 care services, data for Northern Ireland not available.
- Self-funders and local authorities pay different rates. The figures above are averages based on the fees paid by self-funders. Self-funders typically pay more for a care home than a local authority.
- Fees also reflect an individual's care needs. Care homes and nursing homes that provide specialist care for people with dementia usually charge higher fees than those who don't provide that level of support.
- Prices tend to increase annually. In recent years care home fees have been rising steadily - sometimes well above the rate of inflation.
How do care homes structure their fees?
The fees you pay not only depend on where you live, but also on your care needs. For example, a care home is likely to charge a higher fee for someone who has dementia as the levels of care and support that person requires are higher than for a person without dementia.
Likewise, nursing home fees are consistently higher than standard residential care home fees, reflecting the higher level of care that's provided.
Whether the room comes with an en-suite bathroom and whether it is single or shared will also affect the fee - although shared rooms are now far less common.
If you're thinking about choosing a care home, our step-by-step guide explains how to search for and compare local care options.
Will your local authority help pay your care home fees?
To decide if you're eligible for financial support for a care home, your local authority will first carry out a means test. The support you receive will depend on your savings, assets and income.
There are two steps to accessing council-funded care:
- The needs assessment: The first step is to request a free needs assessment from your local authority. This will establish what your care needs are and how best they could be met.
- The financial assessment: If the council decides you have eligible needs for care, it will next carry out a financial assessment (also known as a 'social care means test'). This will look at your capital (savings and assets) and income to work out whether you have the means to pay for some or all of your care.
There are thresholds for savings and assets, known as 'capital limits for care', which vary across the UK. If the value of your savings and assets is higher than the capital limit in your area, then you'll need to pay for your own care.
The council steps in to pay towards your care if the total value of your assets falls below the upper capital limit. Even if you qualify for council funding, you’ll still need to contribute to care costs from your income - if you have a pension, for example - and the council will pay for the rest.
If you have less money than the upper limit, but more than the lower limit, you’ll also pay a ‘tariff income’, which is £1 a week for every £250 you have in savings between the two limits.
The limits for 2023-24 are as follows:
| Country | Upper capital limit | Lower capital limit |
|---|---|---|
| England | £23,250 | £14,250 |
| Scotland | £32,750 | £20,250 |
| Wales | £50,000 | £50,000 |
| Northern Ireland | £23,250 | £14,250 |
Will you get to choose your care home?
If you're eligible for financial support from your local authority, you should be offered a choice of care homes to suit your needs.
If you want to live in a care home that's more expensive than the ones you've been offered, a relative or friend can volunteer to pay the difference between what the council is willing to pay and the fees that your preferred home charges to self-funders. This is known as a care home top-up or a third-party top-up fee.
When will the NHS cover the cost of a care home?
In some circumstances, the NHS will cover the care home fees for people with complex health needs. There are two funding schemes:
- NHS Continuing Healthcare funds care for people who need ongoing health care outside of hospital because they have complex medical care needs due to disability, accident or a major illness.
- NHS-funded Nursing Care may also be available to help pay nursing home fees, if you're assessed by the NHS as needing nursing care.
Neither of these forms of funding is means-tested, but there are strict eligibility criteria. Funding is not restricted to a single setting so could be in a nursing or residential care home, or receiving care at home.
What conditions qualify for NHS Continuing Healthcare?
There is no set list of conditions eligible for additional NHS funding, but assessors look at the nature, intensity, complexity and unpredictability of the condition.
Twelve areas, including breathing and mobility, are ranked from having no needs, to having priority needs. There would need to be at least two 'severe' needs, or one 'priority' need.
Even if you need around the clock care, if your situation is not particularly complex or unpredictable or your needs are categorised as 'high' but not severe or priority, you won't qualify for funding.
Will you have to pay care home fees yourself?
You will have to arrange and pay for a care home if you:
- have savings and assets in excess of the capital limits for care (see above)
- have a regular income that's sufficient to cover your care fees
- don't qualify for local authority funding because your needs weren't found to be eligible following a needs assessment.
Even if you don't expect to qualify for financial support, it's still a good idea to get a needs assessment, because the social services team will make a record of your care needs and provide information about the types of support that are available to meet your needs.
What if you can't afford care home fees?
If you can't afford care home fees and don't want to sell your home (or are finding it difficult to do so), a deferred payment agreement may be a useful option. This is a long-term loan you can request from your local authority if you own your home.
It is effectively a bridging loan to cover your care home costs, using your home as security.
Under a deferred payment agreement, the council will pay your care home fees and secure the loan against your property. You can delay repaying the loan until you choose to sell your home or until after your death.
Can you avoid care home fees?
Meeting the cost of care in later life is one of the biggest financial challenges many of us will face.
But you won't necessarily be paying all of your own fees. While most people will make a contribution towards their care costs, less than half of people in care homes are completely self-funded.
The main ways to avoid paying full care home fees
1. Local authority funding: The amount of local authority support you can get, if any, depends on where you live and your savings, assets and income. This will be worked out through a combination of a care needs assessment and a means test.
You will usually only be eligible for council funding if your savings and assets are below a set threshold (see table above).
While it may be tempting to give away some of your savings or property to have a better chance of qualifying for free care, you'll need to be careful to avoid anything that could be classed as 'deliberate deprivation of assets'.
2. NHS Continuing Healthcare: In certain circumstances, the NHS will cover the cost of a care home if you have complex health needs, but the rules are complex and it's not easy to qualify.
3. Staying in your own home for as long as possible: Depending on the level of care you need, there are various living arrangements and support services that could help you live at home for as long as possible. Read more about some of the best ways to stay independent at home such as home care, home adaptations, sheltered housing.