Choosing a care home for yourself or a loved one is a big decision, and figuring out how to pay for it can feel overwhelming.
In most cases, families pay care home fees through self-funding (private or private with a local authority top up) or through NHS funding and local council support.
Having a basic understanding of these options can help you plan ahead during the process of moving a loved one into a care home, as well as giving you more confidence in the decisions you make.
To make care home funding easier to understand, we’ve put together a summary explaining the different options, what they cover, and how they work.
1) Private Funding
Many people pay for care homes privately, either because they don’t qualify for NHS or council funding or because they want to choose a home that offers specific facilities or locations.
Key points about private funding:
- People who pay privately are responsible for the full cost of their care.
- Private payments offer more choice in care homes, room types, and amenities.
- Funding can come from personal savings, pensions, property sales, or investments.
Private funding is the most flexible option, but it also requires careful financial planning. Some families choose a combination of council funding and private top-up payments to secure the preferred care home.
If you have any questions about private funding, speaking to one of our care home managers in your area is a great place to start. They can provide guidance and support to help you make the right choice for you or your loved one.
2) Local Council Funding
Local councils can provide financial support for care home costs based on a means test, which assesses your ability to pay.
Here’s what happens during a means test:
- Financial Assessment – The council reviews your income, savings, and property. This includes bank accounts, investments, and any other assets you may own.
- Capital Threshold Check – In England, anyone with savings or assets above £23,250 is generally expected to pay for their own care. Those with savings between £14,250 and £23,250 may receive partial funding, while people with less than £14,250 are likely to receive full financial support from the council.
- Assessment of Income Contribution – After reviewing your finances, the council calculates how much of your income can contribute toward care costs each week. Certain essential living expenses are usually protected, so you’re not left without funds for daily life.
- Needs Assessment – Separately, the council evaluates your care needs to determine the level of support required. This ensures any funding provided matches the care you actually need.
The means test ensures that funding is allocated fairly, helping those with limited resources while asking those who can afford it to contribute appropriately.
It’s important to know that council funding usually only covers social care needs, not medical care. The amount provided may not cover the full cost of every care home, so if you choose a home with higher fees, you may need to pay a top-up yourself. You can read more about local authority funding here.
3) NHS Funding
The NHS provides funding for care in certain situations, primarily through Continuing Healthcare (CHC). This is a package of care funded entirely by the NHS for people who have complex health needs.
Here is a breakdown of the key details of how NHS funding works for care home fees:
- NHS funding is based on health needs, not income. The NHS will pay if a person’s main needs are medical, not just help with daily living.
- It can cover care home fees in full if the individual qualifies.
- To get NHS funding, an assessment is needed. Doctors, nurses, and other professionals will look at the person’s care needs to decide if they qualify.
It’s important to note that not everyone in a care home qualifies for NHS funding. If the main need is assistance with daily living rather than medical care, NHS funding may not apply. Click here to read more about NHS funding.
Choosing the Right Option for You
We’ve covered the main care home funding options and what they mean. To make the process of applying for care funding even easier, we’ve put together a few practical tips for both self-funded residents and those receiving support from the local council or NHS:
- Start early: Begin exploring funding options before a move is necessary. Assessments can take time.
- Seek professional advice: Social workers, care advisors, or financial planners can help clarify eligibility and the best funding approach.
- Compare homes: Costs, care quality, location, and services vary widely, so make sure the home meets both care and lifestyle needs.
- Plan for long-term costs: Even if council or NHS funding is available initially, your situation may change, so plan for potential future costs.
Final Thoughts
Care home funding doesn’t have to be confusing. The key is understanding the differences between NHS, local council, and private funding. NHS funding supports those with high medical needs, local councils help with social care costs based on financial assessments, and private funding provides flexibility and choice.
By taking the time to understand these options and seek guidance where needed, families can make informed decisions that balance quality of care with financial planning, ensuring their loved ones are safe, comfortable, and supported.
If you have any questions about self‑funding or local authority funding support, we’re here to help. Get in touch with your nearest care home to speak with a friendly team member who can guide you through your options and answer any questions you may have. Click here to visit our care homes page to find your closest location and contact details.