Paying for care home fees: your options explained
Paying for care home fees, or for care at home, in England usually starts with a council needs assessment, then a financial assessment. If your capital is above £23,250 (2026/27) you normally pay the full cost yourself; below £14,250 the council helps, though you still contribute from income. Your home, benefits and NHS funding can all change the picture.
This guide is general information, not financial or legal advice. The rules below are for England unless stated.
Local authority care home funding: how the council assesses you
The needs assessment
Anyone who appears to need care can ask the council for a free needs assessment, whatever their savings.
The financial assessment
If needs are eligible, the council looks at income and capital, including property in some cases:
- Above £23,250: you usually pay the full cost of your care.
- Between £14,250 and £23,250: the council contributes, and you pay from income plus an assumed "tariff income" of £1 a week for every £250 of capital above the lower limit.
- Below £14,250: capital is ignored, but you still contribute from income.
Care funding in Scotland, Wales and Northern Ireland
In Scotland, people assessed as needing personal or nursing care do not pay for that part of their care, although care home accommodation costs are still means-tested. In Northern Ireland, health and social care trusts arrange care, and care at home is generally provided without charge.
Wales sets a higher capital limit for care home residents, £50,000, about double England's and Northern Ireland's upper limit, and caps weekly charges for care at home at £100 (unchanged since 2024/25).
When your home is counted
Your home is not counted if you receive care in your own home. For a permanent move into a care home, it is usually included, unless a partner, a relative aged 60 or over or who is incapacitated, or a child under 18 still lives there.
Even when it is counted, the council ignores the home's value for the first 12 weeks of permanent care.
See what happens to your home if you move into care.
Help with care home fees: the cap, top-up fees and your allowance
A cap on lifetime personal care costs, planned at around £86,000, was delayed and then cancelled, confirmed in the Autumn Budget 2024. There is currently no cap on care costs in England, so self-funders pay in full until their capital falls below the upper limit, when the council may start to contribute.
If your preferred care home costs more than the council will pay, a relative or friend can pay a "third-party top-up" to cover the difference. This is an extra cost for the family, not help from the council. If the only home suited to your assessed needs costs more than the council's usual rate, it must fund the full cost instead.
Residents whose care home place is arranged by the council keep a minimum Personal Expenses Allowance: £31.80 a week in 2026/27, up from £30.65 in 2025/26.
Deferred payment agreements
A deferred payment agreement lets the council pay care home fees, secured against the property, and recover the money later, usually when the home is sold. You normally need capital, excluding your home, below the upper limit. Interest and administration charges apply; interest is capped at a national maximum.
It avoids a quick sale, but the debt grows over time and reduces what is left for the estate.
NHS continuing healthcare and benefits
NHS continuing healthcare covers the full cost of care, without means-testing, where an assessment finds a primary health need. The bar is high.
Attendance Allowance is paid to people over State Pension age who need help with personal care. It is not means-tested and is paid at two rates; current rates are on gov.uk.
Paying for care home fees yourself: self-funding options
Common routes include:
- Savings, pensions and investments, sometimes with help from family.
- Selling the home, which releases capital but is hard to reverse.
- Renting the home out, which brings rent but also landlord duties and costs; rental income counts in the financial assessment.
- An immediate-needs care annuity, where a lump sum buys a lifelong income towards fees. It gives certainty but needs a lump sum, with the price depending on age, health and fees, and the lump sum may be lost if you die earlier than expected.
- Equity release, which may help fund care at home. Interest compounds so the debt grows, it reduces the estate, and it may affect means-tested support. A plan usually ends when the last borrower moves permanently into long-term care, unless a partner on a joint plan stays at home. See our equity release guide and equity release for care fees.
Deprivation of assets
If a council believes money or property was given away deliberately to reduce care costs, it can treat you as still owning it, with no set time limit. See also gifting money to family.
How costs differ by type of care
- Home care is usually charged by the hour.
- Live-in care is usually charged weekly.
- Care home fees vary by region and by home.
- Nursing home fees are usually higher, because a nurse is on site.
- Dementia care often costs more than standard care.
Getting the right help
Care decisions may need someone with legal authority to act; see lasting power of attorney. An FCA-regulated specialist care fees adviser can explain funding routes; a solicitor can help with legal questions.
Not sure which option fits your circumstances?
Written and reviewed by the Later Life editorial team. Last updated .
Frequently asked questions
Will I have to sell my home to pay for a care home?
Not always. Your home is not counted if you receive care at home, or if a partner or certain relatives still live there. Where it is counted, a deferred payment agreement can delay a sale until later, and some families rent the property out instead. A solicitor or specialist care fees adviser can explain how the rules apply to you.
Is the capital limit the same across the UK?
No. The £23,250 and £14,250 limits (2026/27) apply in England. Scotland, Wales and Northern Ireland each set their own rules and limits, and Scotland also makes payments towards personal and nursing care. It is worth checking the rules for the nation where the person needing care lives, usually through their local council or health and social care trust.
Can I give my home to my children to avoid care fees?
If a council decides you gave away money or property deliberately to avoid care costs, it can assess you as though you still own it. This is called deprivation of assets and there is no fixed time limit. Gifts made for other reasons may be treated differently. A solicitor can explain the risks before anything is transferred.
Who pays for care if my needs are mainly health needs?
If an assessment finds your needs are primarily health needs, you may qualify for NHS continuing healthcare, which covers the full cost of care and is not means-tested. Eligibility is decided by an assessment, not by a diagnosis alone, and the threshold is high. You can ask the NHS team or social worker involved in your care to start the process.
Is there a cap on care home fees?
Not currently. A single cap on lifetime personal care costs, planned at around £86,000, was due to start in October 2023, was delayed to October 2025, and was then cancelled altogether, confirmed in the Autumn Budget 2024. Self-funders pay in full until their capital falls below the upper limit, when the council may start to contribute after a financial assessment.