Care Home Funding Options
A guide to paying for care home fees in England, including council funding, NHS support, and benefits you may be entitled to.
In this guide
Self-Funding
If you have savings, investments, and property worth more than £23,250 (the upper capital limit in England), you'll be expected to pay for your own care. This is known as being a "self-funder."
As a self-funder, you have more choice over which care home you use, as you're not limited to homes that accept council-funded residents. However, you'll typically pay higher fees than the council rate.
It's worth seeking independent financial advice to understand your options, including care fees annuities and immediate needs annuities which can help manage costs.
Council Funding
Your local council may help pay for your care if your savings and assets are below the threshold. You'll need to have a care needs assessment followed by a financial assessment (means test).
How the means test works
- Assets over £23,250: You pay the full cost of your care
- Assets between £14,250 and £23,250: You contribute towards your care (tariff income of £1 per week for every £250 above £14,250)
- Assets below £14,250: Your capital is ignored, though you may still contribute from your income
The council will also assess your income, including pensions, benefits, and any other regular payments. You'll be left with a "Personal Expenses Allowance" of at least £28.25 per week (2025/26 rate) for personal items.
NHS Continuing Healthcare
NHS Continuing Healthcare (CHC) is a package of care arranged and funded solely by the NHS for people with complex, ongoing healthcare needs. It's not means-tested — your income and savings are not considered.
To qualify, you must have a "primary health need" — meaning your main care requirements are health-related rather than social care. This is assessed using a checklist and, if you meet certain criteria, a full assessment by a multi-disciplinary team.
If you qualify, the NHS will pay for all your care home fees, including accommodation. However, qualifying criteria are strict and many people who apply are not successful.
NHS-Funded Nursing Care
If you live in a nursing home and don't qualify for full NHS Continuing Healthcare, you may still receive NHS-Funded Nursing Care (FNC).
Current FNC rate (2025/26)
£254.06 per week
Paid directly to the care home to cover the nursing element of your care.
FNC is paid directly to the nursing home and covers the cost of care provided by registered nurses. You (or the council) still pay for the rest of the care home fees.
Attendance Allowance
Attendance Allowance is a benefit for people over State Pension age who need help with personal care due to a physical or mental disability. It's not means-tested and is tax-free.
Lower rate (daytime OR nighttime care)
£72.65 per week
Higher rate (daytime AND nighttime care)
£108.55 per week
Important: Attendance Allowance stops after 28 days if the council is paying for your care home fees. If you're a self-funder, you can continue to receive it.
Deferred Payment Agreements
If your main asset is your home, you may be able to delay paying for your care using a Deferred Payment Agreement (DPA). This allows you to use the value of your home to pay for care costs, without having to sell it during your lifetime.
Under a DPA, your local council pays your care home fees and places a legal charge on your property. When your home is eventually sold (or after your death), the council recovers the costs plus any interest and administrative fees.
Councils must offer DPAs to anyone who meets the eligibility criteria, but they can refuse if you have other assets that could pay for your care.
Do I Have to Sell My Home?
Your home is not counted in the financial assessment if:
- Your partner or spouse still lives there
- A relative aged 60 or over, or who is disabled, lives there
- A child under 18 whom you're liable to maintain lives there
If none of these apply, your home's value will be included after a 12-week disregard period. During these first 12 weeks, your property is ignored, giving you time to explore options like a Deferred Payment Agreement.
Even after the 12-week period, you don't necessarily have to sell. Options include:
- Deferred Payment Agreement (see above)
- Renting out the property to cover fees
- Equity release schemes