Paying for care at home

How is care at home paid for?

Home care helps older people who are finding it difficult to cope with daily tasks, such as washing, dressing or getting out and about. Also known as domiciliary care, it can enable someone who needs extra support to maintain a degree of independence and stay in their own home for as long as possible.

Care at home is paid for in the following ways in the UK:

• Local authority funding: the local council funds some or all of the care, subject to a means test.
• Self-funding: the person being cared for (or their family) pays all or most of the costs for their care
• NHS funding: the NHS will cover some or all of the costs in certain circumstances.

How much does care at home cost?

The amount you pay for care at home (also known as 'domiciliary care') will depend on the level of care you need and the type of care provider you choose. It may also vary depending on where you live in the UK.

Most home care agencies will quote an hourly rate for domiciliary care services. Fees for live-in care are usually calculated on a weekly basis.

Each year the Homecare Association calculates the minimum rate that local authorities should pay to home care agencies for domiciliary care services.

In 2024-25 the Homecare Association recommends that local authorities should pay a minimum of £28.53 per hour when they are funding home care services. This is the minimum rate at which home care agencies can deliver a financially sustainable service and also comply with the National Minimum Wage and National Living Wage.

But the Homecare Association also says that councils should ideally go beyond this minimum rate and pay a higher price to enable agencies to meet the non-statutory UK, Scottish and London Living Wages. These higher rates factor in extra agency costs, such as travel expenses and office costs.

The recommended higher rates for 2024-25 are:

• London: £31.70 per hour
• Elsewhere in the UK: £29.52 per hour

These rates are recommendations aimed at local authorities and are not fixed in law, but they give a useful indication of the kind of home care fees you can typically expect to be charged.

If you're paying for your own care, an agency can charge whatever it believes to be a fair and competitive price. But you can expect to pay at least the minimum rate of £20+ per hour.

Will your local authority pay for care at home?

To decide if you are eligible for support, the local authority will first carry out a needs assessment.

If you're assessed as having 'eligible needs', the council will then carry out a financial assessment to work out how much you should contribute to the cost of your care. There are thresholds for savings and assets, above which you will need to pay for your own care.

The upper limits across the UK in 2024-25 are as follows:

• England: £23,250
• Wales: £24,000, plus a maximum weekly charge of £100
• Northern Ireland and Scotland: personal care at home is free to those who have been assessed by their local authority as needing it. There is no means test for personal care. Other kinds of support may be charged for.

If you qualify for local authority funding for care at home, you may be offered a personal budget. This is a budget allocated by the council towards meeting your care needs; it enables you to make choices about your own care arrangements.

Will you have to pay for care at home?

In England and Wales, you'll have to pay for your own care at home if any of the following applies to you:

• Your savings and assets are above the means-test threshold for care funding (this doesn't include the value of your home)
• Your income is high enough to cover your care costs, without taking you below a set minimum income level
• Following a needs assessment, your needs weren't found to be eligible for local authority support.

Even if you don't qualify for financial support, it's still important to get a needs assessment

This is worthwhile for a number of reasons:

• The assessment will provide a formal recognition of your needs.
• The council will give you information about the range of services available to meet your needs.
• Even if you are not eligible for funding, you can still ask the local authority to help arrange care services for you (although you will still have to pay for the care).
• The assessment will be important if your needs change in the future.

Care at home is most commonly provided by a home care agency, who will employ the carers and manage the whole process. Alternatively, you can directly employ a private care professional. Fees are generally calculated on an hourly basis, except for 24-hour live-in care, which is usually charged by the week.

Will the NHS cover the cost of care at home?

The NHS will pay all care costs at home under certain circumstances. NHS Continuing Healthcare funds people who need ongoing health care outside of hospital if they have complex medical care needs due to disability, accident or a major illness. This funding is only available for people with complex medical needs and it isn't means-tested.

After a short illness or a stay in hospital, you may be eligible for up to six weeks of NHS-funded care at home. This is called NHS Intermediate Care.

Ways to pay for home care if you're a self-funder

There are several ways that you might raise the funds to pay for your care:

• Savings and investments.
• Income from pensions, work or property.
• Benefits: make sure you are getting all of the benefits you may be entitled to, such as Attendance Allowance, which isn't means-tested.
• Equity release - if you own your home, you might be able to use an equity release scheme to 'unlock' cash from the value of your property.
• Immediate needs annuity: if you release equity from your home or if you already have substantial savings, you could purchase an immediate needs annuity. Although this involves paying out a large sum of money upfront, it can offer the peace of mind of knowing your care fees will be met for as long as necessary.
• Downsizing: selling your current home and buying a smaller one could give you a lump sum to help pay for care.
• Financial help from family or friends.

Consider seeking advice from an accredited later life financial adviser who is a fully listed member of the Society of Later Life Advisers (SOLLA).

Which? members can also call our Which? Money Helpline for guidance on paying for long-term care, as well as a wide range of other money issues.

What happens if you run out of money?

If you are a self-funder, once your savings and assets fall below the threshold for state funding, the local authority then has a duty to contribute to the cost of your care. 

Contact your local authority if your assets fall below this level. It will then carry out a reassessment of your needs together with a financial assessment to decide how much support you're eligible to receive.