Care home costs and how funding works

How care is paid for in England: self-funding, local authority support, NHS Continuing Healthcare and funded nursing care, with signposts to official, free help.

Published 2026-06-16 · A general guide, not legal, medical or financial advice.

How care is paid for in England depends on the person's needs and their finances. The rules are detailed and the thresholds change from year to year, so treat this as a general overview rather than a precise figure, and always get a financial assessment and independent advice before committing. Check current thresholds on GOV.UK.

The main routes

• Self-funding: if someone's capital is above the upper means-test threshold, they pay their own fees. A financial adviser who specialises in care fees can help make savings last, for example through a care fees annuity that guarantees a contribution for life.
• Local authority support: if capital is below the threshold, the council may fund some or all of the care, after a needs assessment and a financial assessment. The council also sets out the maximum it will pay, which may be less than some homes charge, so a top-up can be required.
• NHS Continuing Healthcare (CHC): if someone's needs are primarily about health rather than social care, the NHS may fund the entire cost, including accommodation. CHC is assessed separately and is not means-tested, so it is always worth asking to be assessed if health needs are significant.
• NHS-funded nursing care (FNC): for people in a nursing home who do not qualify for full CHC, the NHS pays a flat weekly contribution towards the nursing element of their care.

The financial assessment

For council support, the means test looks at both income and capital. For permanent residential care the value of the person's home is often included, but with important exceptions, for example where a partner, or certain other relatives, still live there. Between the upper and lower capital thresholds, people contribute on a sliding scale with an assumed income from their capital, and they keep a protected amount of personal income.

Common pitfalls

• Do not give away assets or property to avoid fees without advice. Councils can treat this as "deliberate deprivation" and assess as though you still held them.
• Third-party "top-up" fees must be genuinely affordable and sustainable. Be clear, in writing, who is liable and what happens if the top-up payer cannot continue.
• Always ask to be considered for CHC if health needs are high, even if you have been told you must self-fund. Many people who could qualify never ask.
• Remember to claim other help, such as Attendance Allowance, which is not means-tested and can help with care costs.

Where to get free help

Start with the local council's adult social care team for the needs and financial assessments. The Money Helper service, Age UK and Citizens Advice all offer free, impartial guidance, and a regulated financial adviser can advise specifically on care-fee planning. CareRadar shows the ratings of the homes you are weighing up, so you can consider quality and cost together rather than chasing the lowest price.