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. A relative or friend of a resident can also contribute an additional voluntary payment, known as a top-up fee.
- Self-funding: the person being cared for (or their family or a friend) pays all the costs of their care.
- NHS funding: in some circumstances the NHS will cover the cost of all or some of the care.
These three options are explained below, along with links to more detailed information about each type.
When will the local authority pay for a care home?
To decide if you’re eligible for financial support for 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’ll need to pay for your own 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 want to live in a different care home that is more expensive than the ones you have been offered, a relative or friend can volunteer to pay the difference between what the council is willing to pay and the fees that your preferred home charges to self-funders. This is known as a care home top-up or a third-party top-up fee.
Find out more in our article Care home 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 (see above)
- 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’s usually a good idea to get a needs assessment done, because the social services team will make a record of your care needs and explain the kinds of services that are available to meet your needs.
If you expect to be a self-funder, read our article about the various ways that you might raise money to help pay for your care – and what to do if you run out of money.
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.