Paying for a Care Home: Self-Funding, Council Support and NHS Funding Explained
There is no single price for a care home, and no single way of paying for one. What you pay, and who helps pay it, depends on the type of care needed, how much is held in savings and property, and which UK nation you live in.
This guide sets out how care home funding works in England, with the main differences in Scotland, Wales and Northern Ireland covered further down. It’s general information, not financial or legal advice. Your local council, NHS trust, or an independent financial adviser who specialises in care fees can confirm how the rules apply to your circumstances.
If you’re paying the fees yourself (self-funding)
Whether you pay your own care home fees depends on how much you have in savings, investments and property, known as your capital. In England, if your capital is above the upper capital limit of £23,250, you’re expected to pay the full cost of your care yourself. That figure has stayed the same since 2010 and still applies for the 2026 to 2027 financial year, as confirmed in the government’s annual charging circular for local authorities.
If your capital falls between the upper limit and the lower capital limit of £14,250, your council will usually contribute towards your fees, and you’ll be asked to pay a contribution worked out from what’s called tariff income: £1 a week for every £250 of capital held between the two limits. Below £14,250, your capital is ignored altogether and you pay only from your income.
The 12-week property disregard
If you own your home and are moving into a care home permanently, its value isn’t counted towards your capital for the first 12 weeks. This gives you time to decide what to do about the property rather than forcing a quick sale, and it applies whether or not you turn out to be a self-funder once the 12 weeks are up.
Your home isn’t counted as capital at all, even after 12 weeks, if your partner or another qualifying relative still lives there.
Deferred payment agreements
If most of your money is tied up in a property that can’t be quickly sold, you may be able to arrange a deferred payment agreement with your council. Under this scheme, the council pays towards your care home fees on your behalf and recovers the money later, usually when your home is eventually sold or from your estate, with interest charged in the meantime. Councils in England must offer a deferred payment agreement to anyone who meets the eligibility criteria.
If the council is helping to pay
Getting help from your council starts with a care needs assessment, which looks at what kind of support is needed rather than what can be afforded. If the assessment shows residential or nursing care is needed, your council will then carry out a financial assessment, sometimes called a means test, to work out how much you can contribute.
If your council is contributing, it will normally have arrangements with certain homes at an agreed weekly rate. You keep a minimum personal expenses allowance each week, £31.80 for 2026 to 2027 in England, which is meant for your own spending and shouldn’t be swallowed up by care costs.
Even if you expect to be a self-funder, it’s worth asking your council for a needs assessment. It can help you understand what kind of care is appropriate, and in some areas the council can still arrange your placement even when you’re paying the fees yourself.
Topping up the difference
Councils will usually only pay up to a standard rate for a place in a care home. If you want to move into a home that costs more than that, someone else, typically a relative, friend or occasionally a charity, can agree to pay the difference. This is called a third-party top-up.
You can’t usually pay your own top-up, because you’ve already been assessed as able to afford only the standard rate. There are a small number of exceptions, including during the 12-week property disregard and while a deferred payment agreement is in place.
Top-ups carry a real risk worth thinking through before agreeing to one. Care home fees tend to rise every year, but council contribution rates don’t always rise by the same amount, so the gap, and the top-up needed to cover it, can grow over time. If whoever is paying the top-up can no longer afford it, the placement may need to be reviewed, and in some cases that means moving to a less expensive home. Ask what the top-up currently covers, how it might change, and get independent financial advice before agreeing to an open-ended arrangement.
NHS Continuing Healthcare
NHS Continuing Healthcare (CHC) is a package of care arranged and paid for in full by the NHS, for people with significant, ongoing health needs. Unlike council funding, it isn’t means-tested. Savings, income and property make no difference to whether someone qualifies.
Eligibility is decided by whether a person has what the NHS calls a primary health need, based on the nature, complexity, intensity and unpredictability of their needs, rather than their diagnosis. Most people are first screened using a short checklist, usually completed by a nurse, doctor or social worker. A checklist result that indicates someone might qualify leads to a full assessment, carried out by a multidisciplinary team using a national decision support tool.
Not everyone with significant health needs qualifies for CHC, and being turned down at the checklist or full assessment stage doesn’t mean there’s no other help available through the council or the NHS.
NHS-funded Nursing Care
If someone lives in a nursing home and doesn’t qualify for full Continuing Healthcare, but needs care from a registered nurse, the NHS may pay NHS-funded Nursing Care (FNC) directly to the home towards the cost of that nursing element. From 1 April 2026 the standard rate is £267.68 a week, with a higher legacy rate of £368.24 a week for people who were already receiving it before October 2007. People are normally assessed for Continuing Healthcare first, and only considered for FNC if that assessment doesn’t lead to full funding.
Personal health budgets
Someone eligible for NHS Continuing Healthcare may also be offered a personal health budget: an agreed amount of NHS money to spend on meeting their assessed health needs in a way that suits them, rather than through one fixed care package. Budgets can be held as a notional amount managed by the NHS, paid directly to the person or a nominee, or handled through a third party, and these approaches can be combined.
Personal health budgets are generally used for care and support in someone’s own home rather than to fund a care home place. Supported or extra-care housing arrangements that include an element of care are sometimes agreed case by case with the NHS team involved.
How this differs across the UK
The self-funding and council-funding system above describes England. The other UK nations run their own systems, and some are significantly more generous.
Scotland
Scotland provides free personal care and free nursing care to everyone assessed as needing it, regardless of income or savings. From 1 April 2026 this is worth £260.30 a week for personal care and £117.10 a week for nursing care, paid directly to the care home.
This only covers the personal and nursing care elements of the fees. Residents still contribute towards accommodation and living costs, such as food and heating, based on a financial assessment. Scotland uses its own capital limits for this, which are usually higher than England’s; ask your local council for the current thresholds.
Wales
Wales sets a much higher capital limit for care home residents: £50,000, compared with £23,250 in England. Below that threshold, capital isn’t counted against you and your contribution is based on income instead. Wales also guarantees a weekly personal allowance of £46.35 for 2026 to 2027.
Northern Ireland
Northern Ireland uses the same capital limits as England, £23,250 and £14,250, assessed and administered through your local Health and Social Care Trust rather than a council. The personal expenses allowance is £34.10 a week. Third-party top-ups work in a similar way to England: a relative or friend can agree to cover the gap between the Trust’s standard rate and a more expensive home, but you can’t usually pay it yourself.
Questions worth asking before you sign anything
Whatever is funding the placement, it’s worth reading the care home’s contract carefully and asking questions before committing. Our guide to care home contracts covers what a fair agreement should contain in more detail. Before signing, it’s worth asking:
- Exactly what’s included in the weekly fee, and what counts as an extra, such as hairdressing, chiropody or trips out
- How and when fees are reviewed, and how much notice is given before an increase
- What notice period applies if you want to end the agreement, and what the home requires if it asks a resident to leave
- What happens to the fee, and to the resident’s place, if their care needs change
- How deposits and refunds are handled, including what happens if either side ends the contract early
For anything involving deprivation of assets, trusts, deferred payments or long-term affordability, it’s worth speaking to an independent financial adviser who specialises in care fees, some of whom hold accreditation such as SOLLA (the Society of Later Life Advisers), before making a decision that’s hard to reverse.
Every care home listed on YourCareHome shows the type of care it’s registered to provide, and where the home has given us the information, its weekly fees by care type. Use search to compare care homes near you side by side, including how their fees and funding options compare, before you start making calls.