Care Home Funding Help: How to Pay for Care Home Fees in the UK

Choosing a care home is one of the biggest decisions a family may need to make, and understanding how to pay for care is often one of the most confusing parts of the process. Many families begin searching for care home funding help when they need to understand whether the council, NHS or their own finances will cover the cost of care.

In the UK, there is no single funding route that applies to everyone. The support available depends on factors such as a person’s care needs, health condition, income, savings, property ownership and the results of a financial assessment.

For families considering residential care, dementia care or nursing care, understanding the different funding options early can help avoid unexpected costs and make the transition into care smoother.

This guide explains the main ways care home fees can be funded in England, including local authority funding, NHS support, self-funding and other financial help available.

How Are Care Home Fees Paid in the UK?

Care home fees are usually paid through one of three main routes:

• Self-funding: The person pays the full cost of their care using their own income, savings or assets.
• Local authority funding: The council contributes towards care costs after assessing the person’s care needs and financial situation.
• NHS funding: The NHS may pay towards care costs if someone meets specific health-based eligibility criteria.

The type of care someone needs can also affect funding. For example, a person requiring specialist nursing care may be assessed differently from someone needing residential care with support for daily activities.

It is important to remember that having dementia or another medical condition does not automatically mean care home fees will be fully funded. Eligibility depends on an individual assessment of needs rather than the diagnosis alone.

Do You Have to Pay for a Care Home?

Many people assume that the government automatically pays for care home costs, but this is not usually the case.

In England, local authorities carry out a care needs assessment to decide whether someone requires support with daily living, personal care or other essential needs. If support is required, the council then completes a financial assessment (often called a means test) to determine how much the person may need to contribute.

The financial assessment looks at factors including:

• savings and investments
• income such as pensions and benefits
• property ownership
• other assets

The current capital threshold used for care charging in England is:

• Above £23,250: A person will usually be expected to pay their own care costs.
• Between £14,250 and £23,250: A person may receive some support, but their contribution is calculated based on their financial circumstances.
• Below £14,250: A person’s savings are generally not taken into account, although income may still contribute towards care costs.

These thresholds apply to England and can differ in Scotland, Wales and Northern Ireland.

Because care funding rules can change, families should always check the latest guidance with their local authority or official government advice before making decisions.

Local Authority Care Home Funding Explained

Local authority funding is one of the main forms of care home financial support available in England.

The process usually begins with a needs assessment from the local council. This assessment considers whether someone requires care and support because they are unable to manage everyday activities safely.

Examples of support needs may include:

• help with washing, dressing and personal care
• support with eating and drinking
• assistance with medication
• help managing daily routines
• supervision due to memory problems or cognitive changes

If the person qualifies for support, the council carries out a financial assessment to calculate how much they can contribute towards their care.

The council does not always pay the full cost of any care home chosen by the family. Instead, it usually works within an agreed budget based on the person’s assessed needs. If a chosen care home costs more than the council’s contribution, a third-party top-up payment may be required in some circumstances.

Families should discuss funding arrangements with both the local authority and the care provider before moving into a care home to understand exactly how fees will be covered.

NHS Continuing Healthcare Funding

Some people with complex medical needs may qualify for NHS Continuing Healthcare (CHC).

Unlike council funding, NHS Continuing Healthcare is based on health needs rather than income or savings. If someone is assessed as eligible, the NHS can cover the full cost of their care package, which may include care provided in a care home.

Eligibility is determined through an assessment process that considers factors such as:

• the type of health needs a person has
• how complex those needs are
• how intense the support required is
• how unpredictable their condition may be

Conditions such as dementia, Parkinson’s disease, neurological conditions or long-term illnesses may sometimes involve needs that require assessment for NHS funding, but the diagnosis itself does not guarantee eligibility.

For example, two people with the same dementia diagnosis may receive different funding decisions depending on how their symptoms affect their health, safety and daily care requirements.

The NHS Continuing Healthcare assessment focuses on the person’s overall care needs rather than the name of their condition.

NHS-Funded Nursing Care (FNC)

For people living in a nursing home who require registered nursing support but do not qualify for NHS Continuing Healthcare, NHS-funded Nursing Care (FNC) may be available.

FNC is a contribution paid by the NHS directly to the nursing home to help cover the cost of nursing care provided by registered nurses.

A person may be considered for NHS-funded Nursing Care if:

• they live in a registered nursing home
• they require care from a registered nurse
• they do not meet the criteria for NHS Continuing Healthcare

The amount paid through NHS-funded Nursing Care is set nationally and is reviewed periodically.

This funding does not usually cover the full cost of a nursing home placement. Instead, it contributes towards the nursing element of care, while other costs such as accommodation, meals and personal support may still need to be covered through other funding arrangements.

Paying Privately for a Care Home (Self-Funding)

Many people fund their own care home placement, particularly if they have savings, investments, property or income that takes them above the local authority funding threshold.

Self-funding means the person, or their family acting on their behalf, pays the care home fees directly.

People who self-fund may have more flexibility when choosing a care home because they are not restricted by council funding limits. However, it is still important to understand exactly what is included within the weekly fee.

Care home costs may include:

• accommodation
• meals and refreshments
• personal care
• activities and wellbeing support
• laundry services
• nursing support where applicable

Additional charges may apply for certain services, so families should ask for a clear breakdown of fees before making a decision.

Planning ahead can help families understand how long savings may last and what options may be available if circumstances change in the future.

Can You Get Help Paying for Dementia Care?

Many families searching for care home funding help are supporting someone living with dementia and want to understand whether dementia care is funded by the NHS or local authority.

A diagnosis of dementia does not automatically mean that care home fees will be paid in full. Funding decisions are based on the person’s assessed needs, how their condition affects daily life and whether they meet specific eligibility criteria.

Dementia can affect people in very different ways. Some individuals may need support with:

• remembering important information
• managing medication safely
• preparing food and maintaining nutrition
• personal care
• mobility and preventing falls
• dealing with confusion, distress or changes in behaviour
• staying safe when living independently

If these needs become difficult to manage at home, a person may be assessed for social care support. The assessment considers the level of help required rather than the dementia diagnosis alone.

Some people with advanced dementia may have complex health needs that require an NHS Continuing Healthcare assessment. Others may receive local authority support or fund their care privately depending on their circumstances.

Understanding the difference between dementia care needs and dementia care funding is important because the two are assessed separately.

You can learn more about different dementia conditions and care requirements in our guides to
What Is Dementia Care?
Types of Dementia
The Later Stage of Dementia

What Benefits Can Help With Care Costs?

Although benefits do not usually cover the full cost of a care home placement, some benefits may provide additional financial support depending on a person’s circumstances.

Potential sources of financial support may include:

Attendance Allowance

Attendance Allowance is a benefit for people over State Pension age who need help with personal care because of an illness or disability.

It is not means-tested, meaning savings and income are not normally considered when deciding eligibility.

However, eligibility can change if someone moves permanently into a care home and receives local authority funding, so families should check how benefits are affected by their specific funding arrangement.

Pension Income

A person’s pension income is usually considered when calculating contributions towards care costs.

This may include:

• State Pension
• workplace pensions
• private pensions
• other regular income

For people receiving local authority support, some of their income may be used towards their assessed contribution.

Other Benefits and Support

Depending on circumstances, some people may receive additional financial support through disability-related benefits or other allowances.

Because benefit rules can change and depend on individual circumstances, families should check current eligibility through official government guidance or seek advice from a qualified benefits adviser.

What Happens If Someone Cannot Afford Care Home Fees?

One of the biggest concerns families have is what happens when savings begin to reduce and a person can no longer afford to pay privately.

If someone is self-funding and their financial circumstances change, they should contact their local authority before their funds run out.

The council can complete a financial assessment to determine whether the person may become eligible for support.

Families should avoid waiting until savings have completely disappeared because:

• assessments can take time
• care arrangements may need to be reviewed
• funding responsibilities need to be agreed properly

A person’s care needs remain the priority. Running out of money does not mean someone will immediately lose their care placement, but funding arrangements may need to be reassessed.

Can You Use Your House to Pay Care Home Fees?

Property ownership is one of the most common concerns when families look into care home funding.

If a person moves permanently into a care home, the value of their home may be considered during a financial assessment. However, there are circumstances where a property may not be included immediately.

For example, a property may be disregarded in certain situations, such as when a spouse or certain qualifying relatives continue to live there.

The rules around property and care costs can be complex, so families should seek advice before making decisions about selling a home or using property assets.

Deferred Payment Agreements Explained

A Deferred Payment Agreement (DPA) is an arrangement offered by local authorities that may allow eligible homeowners to delay paying some care costs until a later date.

A DPA works by allowing the council to provide financial support against the value of a person’s property. The costs are usually repaid later, often when the property is sold or after the person’s death.

To qualify, a person generally needs to:

• own a property that can be used as security
• meet the local authority’s eligibility criteria
• have a suitable care arrangement in place

A deferred payment agreement is not a free payment scheme. Interest and administrative charges may apply, so families should fully understand the terms before agreeing to one.

What Are Care Home Top-Up Fees?

Care home top-up fees can become confusing for families arranging local authority funding.

A top-up fee is an additional amount paid when the cost of a chosen care home is higher than the amount the local authority has agreed to contribute.

For example:

• The council agrees to pay a set amount towards care.
• The selected care home charges a higher weekly fee.
• The difference may need to be covered through a top-up payment.

Top-ups usually cannot be paid by the person receiving care if they are unable to afford the additional amount. In many cases, a third party such as a family member may need to make this payment.

Before agreeing to a care home placement, families should understand:

• the total weekly cost
• what services are included
• whether fees may increase
• who will be responsible for any additional payments

Clear communication between the family, council and care provider can prevent financial difficulties later.

How to Find Out What Care Funding You May Be Eligible For

Understanding care funding can feel complicated, especially when families are making decisions during a stressful period.

A good starting point is:

1. Request a Care Needs Assessment

Contact your local authority to arrange an assessment. This looks at what support a person needs and whether they qualify for help.

2. Complete a Financial Assessment

If support is required, the council will review finances to determine whether the person needs to contribute towards care costs.

3. Check NHS Funding Eligibility

If someone has significant health needs, ask whether they should be assessed for NHS Continuing Healthcare or NHS-funded Nursing Care.

4. Understand Care Home Fees Clearly

Before choosing a care home, ask about:

• weekly fees
• included services
• additional charges
• funding arrangements accepted
• future fee increases

5. Seek Independent Advice Where Needed

Care funding decisions can involve complex financial and legal considerations. Families may wish to speak with a specialist adviser before making major decisions involving property, savings or long-term care costs.

How Landona House Care Group Supports Families

Choosing a care home is about more than understanding fees. Families also need confidence that their loved one will receive safe, compassionate and personalised support.

At Landona House Care Group, we provide Residential Care, Nursing Care, Dementia Care and Respite Care designed around each resident’s individual needs.

Our care teams support residents with:

• personal care and daily routines
• medication support
• nutrition and wellbeing
• meaningful activities
• maintaining independence
• specialist support for people living with dementia

We understand that arranging care can involve difficult decisions about health, family responsibilities and finances. Our teams can help families understand the care available, discuss individual requirements and explain how placements work.

If someone’s needs have changed and independent living is becoming difficult, speaking with a care provider early can help families explore options before a crisis occurs.