Reviewed by Helen Davies-Parsons
Considering a move for your parent or elder relative into a care home can be a daunting prospect, particularly when it comes to figuring out how on earth to pay for it.
Residential care is expensive in the UK, and it is easy to get confused when trying to understand how much it will cost, how everything works and what support towards the costs of care your parent or elder relative might be entitled to.
Read on to learn more about care home costs in the UK and how to pay for it.
How much do care homes cost in the UK?
According to Age UK, it costs on average around £800 a week for a place in a standard residential care home (or £41,600 a year) and £1,078 a week for a place in a nursing home (£56,056 a year). However, these are UK average figures, and costs in areas like London and the South East can be upwards of around £1250 per week (£65,000 a year). These fees may be way beyond your parent’s income from pensions, savings and investments, meaning you or they will need to find additional means to pay for it.
How do people pay for residential care?
Essentially, there are three main ways older people pay for care homes in the UK.
According to figures from the ONS (Office of National Statistics), approximately half of care home residents aged 65+ fund themselves (self-fund).
If their income from pensions, savings and investments doesn’t cover the full costs, people usually secure funds to pay for residential care through one of the following routes:
- Selling or renting out their home
- Equity release
- Investing in a care fee annuity
- Deferred payment agreement via the local council
Each route has its pros and cons, and it’s always a good idea to seek independent financial advice when considering which option to take. The likely duration of their stay in residential care should also be considered.
It’s worth noting that, regardless of their financial means, self-funders can still claim certain government benefits to contribute towards the cost of their care, including Attendance Allowance.
Fully or partially funded by social services
If your parent is eligible for state funding, their local authority will pay for all or some of the care home costs.
To receive support from state funding, your parent or elder relative would need to have a care needs assessment and financial assessment carried out by their local authority social services team. If they determine that your parent or elder relative requires care, the amount they will need to pay towards the care home fees and how much the state will pay will depend on the total value of their income and assets (savings, investments and property), as well as where in the UK they live.
England and Northern Ireland: If your parent or elder relative lives in England or Northern Ireland and has income and capital over £23,250, they won’t be eligible for funding support from social services. If they have income and capital between £14,250 and £23,250, they will be eligible for some funding from social services towards their care. If they have income and capital less than £14,250, social services will fully fund their care.
Scotland: If your parent or elder relative lives in Scotland and has income and capital over £32,750, then they only need to pay for the accommodation costs of residential care. This is because everyone in Scotland who is determined as needing personal or nursing care gets it for free up to a certain limit, regardless of their financial status. If they have less than £20,250, they won’t have to pay anything.
Wales: In Wales, there is just one threshold of £50,000. If your parent or elder relative has income and assets above this amount, they will have to pay for all their residential care costs.
Fully or partially funded by the healthcare service
In England, Wales and Northern Ireland, if your parent has qualifying health conditions, they may be able to get help with their nursing care costs via the NHS, either through Continuing Healthcare Funding or Funded Nursing Care.
Continuing Healthcare (NHS CHC) is not means tested and pays for the full cost of residential care for people who have significant ongoing health needs. If your parent develops a condition or has an accident which results in their having intensive care needs, then they may be eligible for NHS Continuing Healthcare.
Unfortunately, the process of securing CHC is complex and lengthy – even healthcare professionals struggle – and it can be very hard to access. Even when eligible, most people end up needing to hire a lawyer or expert to assist with securing CHC. But if you think your parent may be eligible, you should request a checklist assessment from their health or social care team, and don’t take no for an answer.
Funded Nursing Care (FNC) is when the NHS pays for the nursing care component of nursing home fees. It is available for elderly people who live in nursing homes who are not eligible for NHS Continuing Healthcare, but have been assessed as needing care from a Registered Nurse. This means that the NHS will pay money towards the nursing home where the elderly person lives, to pays for the nursing care component of their nursing home fees.
A person’s eligibility for NHS-funded Nursing Care is made after they have been assessed and found to be ineligible for NHS continuing healthcare.
Proposed cap on care costs in England
The Government is planning to reform social care in England, including the introduction of a ‘cap’ on care costs. The long-awaited cap will mean that nobody pays more than £86,000 towards their care costs during their lifetime – local authorities will have to pay for care over that amount. Be aware though that the cap specifically applies to care costs, not to daily living costs or accommodation.
Although it was originally due to come into effect in October 2023, the Government have delayed these reforms and it is now expected to be introduced in October 2025.
You can find out more about this and other proposed social care reforms at Gov.uk.
Navigating care home costs and funding routes can be a real headache, particularly if you are trying to secure funding support from your parent or relative’s local authority or the NHS.
If you parent is not eligible for full or partial funding support, but owns their own property or has other assets they could leverage to pay for care, take note of the options mentioned above and arrange to speak to an independent financial advisor for guidance on which route to take to make the most out of your parent’s income and assets.
- Can we choose any care home if my parent is receiving local authority funding?
If your parent or relative’s local authority is covering or contributing towards the cost of their residential care, they will provide a list of available care homes for you or your parent to choose from within their budget.
If you or your parent would prefer them to move into a more expensive care home than those on the list, the council may still agree to pay for it, providing a third party, such as a family member, agrees to pay the extra amount (known as a top-up fee). Your parent, as the resident, cannot pay this extra amount.
- What happens to self-funders if their money runs out?
If a care home resident is self-funding and they can no longer afford their care home fees, their local authority should reassess their situation to determine if they now qualify for state-funded support.
- How do I know what sort of care home to choose?
When deciding what type of care home would best suit your parent or relative, a good place to start is getting your parent or elder relative a needs assessment from their local authority. This will help you get clarity on their current and future care needs. Based on this, social services can then help you decide what sort of care home would be most suitable, before you begin your search.
Learn more about types of care homes and how to choose.