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Financing care
Learn about funding options for home care, home adaptations and care homes, together with Attendance Allowance, gifting assets and Power of Attorney.
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Guidance on the practical and emotional aspects at the end of life, from planning end of life care to arranging a funeral and coping with bereavement.

How is care at home paid for?

Home care helps older people who are finding it difficult to cope with daily tasks, such as washing, dressing or getting out and about. Also known as domiciliary care, it can enable someone who needs extra support to stay in their own home for as long as possible and maintain a degree of independence.

Care at home is paid for in the following ways in the UK:

  • Local authority funding: the local council funds some or all of the care, subject to a means test.
  • Self-funding: the person being cared for (or their family) pays all or most of the costs for their care
  • NHS funding: the NHS may cover some or all of the care costs in certain circumstances.

Not sure if home care is the right option? Read about the pros and cons of care at home:

When will the local authority pay for care at home? 

To decide if you are eligible for support for care, the local authority will first carry out a free needs assessment.

If you’re assessed as having ‘eligible needs’, the council will then carry out a financial assessment to work out how much you should contribute to the cost of your care. There are thresholds for savings and assets, above which you will need to pay for your own care.

The upper limits in 2021-22 are:

  • England: £23,250
  • Wales: £24,000
  • Northern Ireland and Scotland: personal care at home is free to those who have been assessed by their local authority as needing it. There is no means test for personal care. Other support not classed as personal care may be charged for.

If you qualify for local authority funding for care at home, you may be offered a personal budget. This is the budget allocated by the council towards meeting your care needs; it enables you to make choices about your own care arrangements.

Read more about council funding for home care and how the financial assessment works across the UK in our guide to local authority funding for home care.

You’ve got to find out as much as you can, and dig and dig and dig. There's a range of benefits that everybody is entitled to.

Self-funding care at home

In England and Wales, you’ll have to pay for your own care at home if any of the following applies to you:

  • Your savings and assets are above the threshold for care funding (but this won’t include the value of your home)
  • Your income is high enough to cover your care costs without taking you below a minimum income threshold
  • Your needs weren’t found to be sufficient following a needs assessment.

Even if you don’t qualify for financial support, it’s still a good idea to get a needs assessment

This is worthwhile for a number of reasons: 

  • The assessment will provide a formal recognition of your needs.
  • The council will give you information about the range of services available to meet your needs.
  • Even if you aren’t eligible for funding, you can still ask the local authority to arrange care services for you (although you will be charged the full price of the care).
  • The assessment will be important if your needs change in the future.

Care at home is most commonly provided by a domiciliary care agency, who will employ the carers and manage the whole process, or you can employ a private care professional. Fees are generally calculated on an hourly basis, except for 24-hour live-in care, which is usually charged by the week.

For information about how much care at home costs, read our article on home care fees:

How to pay for home care if you’re a self-funder 

There are several ways that you might raise money to help pay for your care:

  • Savings and investments.
  • Income from pensions, work or property.
  • Make sure you are getting all of the benefits you are entitled to, including Attendance Allowance, which isn’t means-tested.
  • Equity release: if you own your home, you might be able to use an equity release scheme to ‘unlock’ cash from the value of your property.
  • If you release equity from your home or if you already have substantial savings, you could purchase an immediate needs annuity. Although this involves paying out a large sum of money upfront, it can offer the peace of mind of knowing your care fees will be met for as long as necessary.
  • Downsizing: selling your current home and buying a smaller one could give you a lump sum to help pay for care.
  • Financial help from family or friends.
  • Letting a room: if you have enough space, you might consider letting a room to a lodger. This can help raise extra money without the need to move house.

Remember, you may not be permanently self-funding. Once your assets drop below a certain level, you may then qualify for state funding. 

For more ideas on how to cover care costs, see our article on Self-funding a care home. Although moving to a care home involves different financial challenges, many of the strategies we cover can also be applied to funding care in your own home.

Whichever option you consider, seek advice from a specialist accredited later life adviser who is a fully listed member of the Society of Later Life Advisers (SOLLA).

Which? members can call our Which? Money Helpline for guidance on paying for long-term care, as well as a wide range of other money issues. 

Which? Money Helpline
Which? members get free one-to-one guidance on money matters relating to paying for care. Call Mon–Fri, 9am–5pm to speak to one of our experts.

When will the NHS cover the cost of care at home?

The NHS will pay all care costs at 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. This funding isn’t means tested.

After a short illness or hospital stay, you may be eligible for up to six weeks of free support. This is called NHS Intermediate Care - our guide explains who's eligible and what it entails. 

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Paying for care in later life: download our free guide

Our guide provides straightforward information to help you navigate the challenges of paying for care in later life.  

The guide explains how care is funded across the UK, how much different care services typically cost, and how to find out if you’re eligible for financial support. It also gives useful tips on how to juggle your finances if you have to cover some or all of the costs yourself.

The guide is free to download.

Paying for care in later life
(pdf 2)
Download

 

 

What happens if I run out of money?

If you are a self-funder, once your savings and assets fall below the threshold for state funding, the local authority then has a duty to contribute to the cost of your care.

Contact your local authority if your assets fall below this level. It will then carry out a reassessment of your needs together with a financial assessment to decide how much support you're eligible to receive.

If you live in England, the Which? cost of care and eligibility checker is a simple tool that helps you work out how much care might cost in your area, and whether you’d be eligible for financial support. 

If you’re a self-funder, it can also help you calculate how long your funds will last. After you've completed the first step in the calculator, simply scroll down the results page to ‘What happens when the money runs out?’ and enter your details (see the screenshot below).

Further reading

Home care fees

Home care fees can vary according to where you live in the UK and the type of care you need.

Last updated: 28 Apr 2021