The costs of Care
It costs a lot to pay for care in a nursing home. There is some help to pay for the costs, but the care system can be hard to understand and navigate.
You might be able to get help from your local council or, in some cases, from the NHS. If you need to self-fund your care, you may want to consider your options around Care Plans.
Please note: care funding rules, means-test thresholds and allowances change regularly and differ across England, Scotland, Wales and Northern Ireland. Planned reforms to the care funding system have also been delayed, so always check the current figures on GOV.UK before making decisions.
At a glance
- First step
- Free care needs assessment
- Funding
- Means-tested by council
- Fully NHS-funded
- If eligible for NHS CHC
- Check current rules
- GOV.UK
Key Takeaways
- The cost of care can be subsidised by the local council, but it is means tested.
- The costs differ between regions.
- You may be able to consider a Care Plan to support the costs of care.
How do I start setting up care?
Get a care needs assessment from your local council. This is the first step to getting care, whether you need changes to your home, home care, or a spot in a care home.
A care needs assessment is free, and you have the right to one no matter how much money you have or how much help you need.
You can set up a care needs assessment for a family member or friend, but they have to agree to it (unless they aren't able to make or communicate their own decision).
What will the cost of care be?
If you are eligible for funding help, your local council must figure out how much your care will cost in total and, using the means test, how much you will have to pay out of your own money. The council must make sure that the total cost number it comes up with, called the "personal budget," is high enough to pay for at least one good care home.
You will have to pay some of the cost out of your income, such as pensions, which are part of the financial assessment. However, if you are in a care home funded by the council, you must be left with a minimum weekly Personal Expenses Allowance (PEA) that you can keep for personal spending.
The exact amount is set by the government and reviewed periodically, and the council can decide to raise it depending on your situation. You can check the current PEA on GOV.UK.
Read on to find out more about the means test.
Care is expensive, and costs have risen sharply in recent years. As a rough guide, home care is charged by the hour, while residential and nursing care in a care home typically run into the tens of thousands of pounds a year.
Figures vary widely by region, provider and level of need, so treat any headline average as illustrative only:
| Type of Care | What to expect |
|---|---|
| Home Care | Charged per hour, varying by area and provider |
| Residential Care | Typically tens of thousands of pounds per year |
| Nursing Care | Higher again, reflecting the added nursing element |
For up-to-date national and regional cost figures, sources such as the GOV.UK care and support pages and Age UK publish regular data.
Care Funding from the NHS
Under NHS continuing healthcare, if your main needs are health-related, the NHS will arrange and pay for your care (NHS CHC). If you qualify for NHS CHC, your stay in a care home is free.
When the council looks at your needs, if it seems like you might be eligible for NHS CHC, it must send you to the NHS.
If you don't meet the requirements for NHS CHC but still need nursing care, the NHS makes a payment directly to the nursing home to help pay for the care. This is called nursing care paid for by the NHS (NHS FNC).
Speak to your Doctor to see if you are eligible.
How could how much money I have change how much I have to pay for my care?
If your local council conducts your care needs assessment and finds that you need a place in a care home, they will do a means test to figure out how much of the cost of your care you will have to pay. This will take into account how much money you make and how much you have saved.
In the means test, money from certain disability benefits is not counted as income. All other income and assets can be considered.
In the means test, the value of your home may be counted as capital. But there are times when the council can't use your property as part of the means test, such as when a spouse or certain relatives still live there.
Because your home is often the largest asset involved, some people explore options such as releasing equity for retirement or gifting a home to their children — but be aware these can affect a means test and may be treated as "deliberate deprivation" of assets, so take advice first.
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Will the cost of care depend on where you live?
The cost of a care home place will depend on where you live, the care home you choose, and your own financial situation. Nursing homes generally cost more than residential care homes because of the additional nursing element, and prices in and around London and the South East tend to be higher than elsewhere.
Research consistently shows that the cost of residential and nursing care varies a lot depending on where you live in the UK, so it's worth getting local quotes rather than relying on a national average.
What happens if I have no money left for Care?
If you are self-funding and your capital falls below the upper capital limit set by the government, your local council may start to help with the cost of your care. This threshold, and the way your income and assets are assessed, differ across the UK and are subject to change, so check the current limits on GOV.UK.
You should ask for a reassessment a few months in advance, as the council will need to agree that you meet the eligibility criteria.
How can a Care Plan help?
If you are not eligible for support, you may want to consider your options around Care Plans.
A care plan can help financially support the cost of long-term care needed in later life. If an illness, condition, or disability leaves you needing care, and you are over 60, you would be able to consider lifetime care plans which allow you to purchase a plan with a one-off lump sum, in return for support with the costs of care.
What is a Care Plan?
You pay a one-off lump sum payment, in return for monthly contributions towards your care. There are different types of policies available to help keep your insurance flexible.
How do I arrange a Care Plan?
Speaking with a later-life or financial adviser may reveal ways to protect your wealth other than using a care plan. It's just as important to review later-life needs as it is to look after your current finances.
You may also want to consider alternatives to equity release for retirement planning as part of the wider picture.
For more information on care planning, review our Care plans page.
Many people ask whether the fees can be avoided altogether — see can I avoid care home fees and why the seven-year rule does not apply.
