Who pays for care?
There are more than 400,000 people in the UK living in residential and nursing care homes. Of these, almost half pay for care themselves and the rest are supported, either wholly or partly, by their local authority or the NHS.
How is a care home paid for?
Care homes are paid for in the following ways in the UK:
Local authority funding: the local authority funds some or all of the care, but a relative or friend of a resident can also contribute an additional voluntary fee, known as a third-party top-up fee.
- Self-funding: the person being cared for (or their family or a friend) pays all the costs for their care.
- NHS funding: in some circumstances, the NHS may also contribute to the cost of all or some of the care.
These three funding options are explained below, along with links to more detailed information about each area.
When will the local authority pay for a care home?
To decide if you’re eligible for financial support to pay for a placement in a care home, the local authority will first carry out a free needs assessment to work out what level of care you require.
If you’re assessed as having ‘eligible needs’, the authority will next carry out a financial assessment to gauge whether you are eligible to have some or all of your care costs funded by the council. There are thresholds for savings and assets (known as ‘capital limits for care’) – if your savings and assets are worth more than the capital limit in your area you will need to pay for care. The upper limits for a care home financial assessment in 2019-20 are:
- In England and Northern Ireland: £23,250
- In Scotland: £28,000
- In Wales: £50,000.
Read more about the financial assessment in local authority funding for a care home.
Third-party top-up fees
If you’re eligible for financial support from your local authority, you should be offered a choice of care homes to suit your needs. If you should want to live in a different care home and you have a relative or friend who could pay the difference between what the authority will pay that care home and the fee the home charges self-funders, that person can volunteer to pay the difference, known as a third-party top-up fee.
Find out more about top-up fees:
When will you be a self-funder?
You will have to arrange and pay for a care home if you:
- have savings and assets in excess of the capital limits for care
- don’t qualify for local authority funding because your needs weren’t found to be sufficient following a needs assessment.
Even if you choose not to apply for financial support, it can be beneficial to get the needs assessment done because the social services will be able to explain the range of services available to meet your needs.
If you are a self-funder, there are several ways that you might raise money to help pay for your care.
When will the NHS contribute to the cost of care in a care home?
The NHS will pay all care costs in a care 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.
- NHS-funded Nursing Care is also available in nursing homes if you’re assessed by the NHS as needing nursing care.
Neither of these forms of funding is means tested.
Care home fees vary across the UK. It also depends on the type of care home you are looking for and your care needs.
Government funding might be available to help pay for a care home. We explain the means test and other rules.
An overview of the most important elements of the financial assessment for residential care.