Care home fees are one of the biggest financial shocks families face in later life. Weekly costs average £800–£1,200 for residential care and £1,000–£1,500 for nursing care, and they can last for years. Understanding who pays — and when the council or NHS steps in — can save tens of thousands of pounds or prevent distressing mistakes with assets.
What Do Care Homes Cost?
| Type of Care | Average Weekly Cost (England, 2026) |
|---|---|
| Residential care | £800–£1,000 |
| Nursing care | £1,000–£1,400 |
| Dementia specialist care | £1,100–£1,600 |
Costs vary significantly by region — London and the South East are typically 20–30% higher than national averages. Self-funders also generally pay more than the council rate for the same bed.
Care home charges typically cover:
- Accommodation and meals
- Personal care (washing, dressing, mobility support)
- Social activities on-site
They may not include: specialist nursing care beyond basic nursing home provision, complex health treatments, prescriptions (covered by NHS), incontinence products (some councils provide), or hairdressing and personal extras.
Who Pays for Care Home Fees?
There are four possible payers — often in combination:
- You (self-funding) — if you have assets above the capital threshold
- Your local authority — if you have assets below £23,250 (England) and have been assessed as needing care
- The NHS — if you qualify for NHS Continuing Healthcare (CHC)
- A combination — local authority funding topped up by family or your income
The Means Test: How the Council Assesses You
Before the council contributes to care fees, they carry out a financial assessment. This looks at both your capital (savings and assets) and your income.
Capital Thresholds (England 2026)
| Capital Level | Outcome |
|---|---|
| Above £23,250 | You self-fund entirely |
| £14,250 to £23,250 | You contribute from capital (sliding scale), council tops up |
| Below £14,250 | Capital is disregarded; only income contributions required |
Note: for every £250 of capital between £14,250 and £23,250, £1 per week is added to your assessed contribution from savings.
Other Nations
| Country | Upper Threshold | Lower Threshold |
|---|---|---|
| Scotland | £35,000 | £20,250 |
| Wales | £50,000 | £50,000 (single threshold) |
| Northern Ireland | £23,250 | £14,250 |
Scotland and Wales generally have more generous thresholds.
Does Your Home Count?
Your home’s value is one of the most contested issues in care funding.
When the Home IS Counted
If you move permanently into a care home and none of the disregards below apply, the council includes your property value in the means test after a 12-week property disregard period.
During the first 12 weeks, the home’s value is ignored — giving you time to arrange a sale or funding without panic.
When the Home Is NOT Counted (Disregards)
Your home is permanently disregarded (never counted) if it is occupied by:
- Your spouse or civil partner
- A dependent child under 16
- A relative who is aged 60 or over
- A relative who is incapacitated (disabled or severely ill)
- A former carer who gave up their own home to care for you and has lived with you for 2+ years
Deferred Payment Agreement
If your home is counted but you cannot sell it quickly (e.g. tenants, joint ownership complications), the council may offer a Deferred Payment Agreement (DPA). The council pays your care costs as a loan secured against your property, repaid from the eventual sale. Interest applies, but it prevents forced sales.
Your Income and the Personal Expenses Allowance
The council can take most of your income towards care costs, but must leave you with a Personal Expenses Allowance of:
| Country | Personal Expenses Allowance (per week) |
|---|---|
| England | £30.15 |
| Scotland | £32.65 |
| Wales | £35.00 |
| Northern Ireland | £30.15 |
Income counted includes:
- State Pension
- Private and occupational pension income
- Most DWP benefits
- Rental income
Income not counted:
- Disability Living Allowance (mobility component) — disregarded
- PIP (mobility component) — disregarded
- Any earnings (you are unlikely to have these in a care home)
Savings Credit Disregard
If you receive Savings Credit (part of Pension Credit), a portion of up to £10.75 per week is disregarded in the means test in England.
NHS Continuing Healthcare: Fully Funded Care
NHS Continuing Healthcare (CHC) is the big prize in care funding. If you qualify, the NHS pays 100% of care costs — including accommodation — for as long as needed.
Who Qualifies?
Eligibility is based on need being a primary health need, assessed through:
- Checklist screening — carried out by a nurse or social worker
- Full CHC assessment — multi-disciplinary team using the Decision Support Tool
The DST assesses 12 care domains:
- Behaviour
- Cognition
- Psychological/emotional needs
- Communication
- Mobility
- Nutrition
- Continence
- Skin (including wounds)
- Breathing
- Drug therapies
- Altered states of consciousness
- Other significant needs
A “priority” rating in any domain or “severe” ratings across several domains can result in eligibility.
NHS-Funded Nursing Care (FNC)
Even if you do not qualify for full CHC, if you are in a nursing home and have nursing needs, the NHS may pay a Funded Nursing Care contribution directly to the home: £235.88 per week in 2025/26 (England).
Challenging a CHC Decision
Around 1 in 4 CHC decisions is overturned on appeal. If you or a family member is refused:
- Ask for the full Decision Support Tool completed at each domain
- Request internal review within 3 months of the decision
- If unsuccessful, appeal to the Independent Review Panel
- Seek legal advice or help from a CHC advocate
Keep clinical records, nursing notes, and care assessments — they are essential evidence.
Council Care Rates vs Self-Funder Rates
Local authorities negotiate bulk rates with care homes and typically pay 15–30% less than self-funders for the same care. If the council’s agreed rate does not cover the full cost of a particular home, a family member can pay a third-party top-up to bridge the gap — but this is a formal agreement, not optional. See our Care Home Top-Up Fees Guide.
Deliberate Deprivation of Assets
Giving away assets to fall below the means-test threshold is known as deliberate deprivation — and councils actively investigate it.
There is no fixed look-back period in law. The council can go back years or even decades if it believes the primary motive was to avoid care fees. Transferred assets can be treated as if they still belong to you, meaning you remain liable.
Legitimate planning includes:
- Joint tenancy to tenancy in common conversion (to separate shares of a jointly owned property)
- Making a will that reflects your individual share
- Legitimate lifetime gifting for genuine reasons long before care becomes foreseeable
Always take specialist care fees financial advice from a qualified adviser.
Checklist: Practical Steps
- Contact your local council adult social services to arrange a needs assessment (this is separate from and before the financial assessment)
- Gather financial information: savings accounts, property valuations, pension income
- Ask whether a CHC screening is appropriate before accepting full self-funding
- Consider a Deferred Payment Agreement if property is involved
- Take independent advice on any estate/asset planning