This article was last updated on 1 September 2021.
I’m sure you will agree that when it comes to finding out about care home costs, it can get very confusing!
On this page, you will find:
UK care fees, sometimes referred to as nursing home fees, are something that you need to calculate carefully. Particularly as the cost of accommodation can be over £1,500 a week.
We have produced a care costs calculator (below) that will allow you to estimate the cost of your care. All you need to do is input in the area of the country where you live, and we will show you the average cost of care homes in your area over the short, medium and long term.
Knowing this information will help you plan how to pay for your care.
The cost of care homes depends on where in the UK you live and what type of care you need.
The latest research shows that average care home fees range from £27,000 to £39,000 per annum for a residential care home. Care costs increase to £35,000 – £55,000 per year if nursing care is required.
The support research was undertaken by Laing & Buisson.
But before we get in to the costs, here is a short video on how you can avoid care home fees
Answered below are some of the most common questions we get asked about care home prices in the UK.
Your ability to pay for care will be determined through a means test called a Care Needs Assessment. You can read more about that here.
In simple terms, as part of the means test, your property will not be included if you’re arranging live-in care and support at home. It may also not be included if you live with a partner, child, or a relative who is disabled or over the age of 60.
Therefore, in this circumstance, you will not need to sell your house and you may be eligible for some support.
The cut-off point after which you are responsible for meeting the cost of your own care home charges is £23,250. If you are paying your own fees then this is known as self-funding. If your capital and income are above this then it is likely that you will need to provide for your own care fees.
More and more older people that need help are now looking at Live in Care and personal care services to provide an alternative to a care home. We would recommend you look at this as you may be eligible to use this option instead.
This is because it is often much cheaper and also means that you can have one to one personal care support, which is important to a lot of families. The costs are also cheaper as you are responsible for providing accommodation for the carer, typically in the home of the person receiving the personal care.
Here is a short video that looks a live in care.
The financial support available will depend on what wealth you have, but if you live in England and have savings of more than £23,250 then paying for care will be your responsibility. This is known as self-funding.
At present, the cost of residential care will be means-tested through a care needs support and financial assessment, which means the more money you have, the less financial support you potentially can receive through a social care budget.
However, if you have what is considered as continuing care needs, then NHS continuing healthcare may still be able to fund all your care. This would be considered outside of any means test financial assessment.
However, to receive this support you need to have a ‘primary health’ need. You can read more about NHS continuing healthcare funding here. If you are looking at fees for someone with dementia, it is likely that the NHS won’t treat this as a primary need.
Therefore, you may still need to fund this yourself and it is about 20% higher than typical nursing care home fees.
Before you move into a care home, your local council will undertake a care needs and financial assessment, which include your income, savings and property and then calculate how much you will need to pay towards your care.
If you do have to find your care fees, then an alternative option to consider is to take care at home and pay for it via equity release.
Use the calculator below to see see how much you could get out of your house.
There is a personal savings threshold for care homes fees in the UK.
If you live in either England or Northern Ireland and have capital valued at less than £14,250 (based on 2019/20 rates), you will be entitled to maximum financial help and support. In effect, this means full local authority funding.
Anyone receiving full local authority funding will have to contribute all of their income (including benefits, which they must claim) to the local council, except for the personal expense allowance.
If you have between £14,250 and £23,250 in capital, you have to pay towards your fees.
You will have to pay £1 for every £250 of your savings between £14,250 and £23,250. This is known as ‘tariff income’. You will also need to contribute all of your income towards the fees, except for the personal expenses allowance.
As explained above, the personal savings threshold is something you need to consider. If you have capital of more than the savings threshold then you will need to use that capital to pay the full cost of the care you need.
The savings threshold for care costs differs depending on which part of the country you live in:
When your local council assesses you to see if paying for care is your responsibility, it will look to include things such as:
If you have been assessed as having more in savings than the £23,250 threshold, then you will be responsible for paying for the care you need.
You will be classed as a self funder, and will be expected to pay for the full cost of your care from your savings and assets.
However, there are some alternative ways of meeting your care costs. For example, you might consider equity release, an immediate care annuity, or NHS Continuing Healthcare Funding.
You should speak to an independent financial advisor if you have any questions about how these alternatives could help you with care home payments in your individual financial circumstances.
If you give away some of your assets as a gift, say to your children, and then look to claim assistance from your local council, they may well say that you have done this deliberately to avoid paying for your care costs.
This is called ‘self-deprivation of assets’ and the local council may well undertake your means test including the value of assets that you gave away. So, you may be expected to pay more for the cost of care than you can afford if you try to intentionally reduce your assets.
This is a complicated area but doesn’t mean you cannot pass what you have to family and friends, as long as you do so while you are still fit and healthy and cannot reasonably be expected to know that you will have to pay for your care in the near future. There is no limit to how far back the council can look when conducting your means test.
If you are interested in protecting your wealth then you may also be able to do so by putting them into a trust. The three most popular types are:
The amount of support changes between local authorities and the type of care you need.
If you have been told that the local authority will help pay towards the cost of care, then they will also tell you how much they are willing to pay towards the cost of your residential care home.
As part of your care needs and financial assessment, your local authority will then arrange a suitable residential care home or nursing care home for you. The care home placement they select will depend on how much the council is willing to contribute to your care costs.
Paying for care means that you have some discretion over where you go. If you are not happy with the accommodation your council has chosen, you can find an alternative care home place.
You can choose to move into a nursing care home even if it is more expensive than what your local council will pay for care. More expensive homes tend to have a higher staff to residents ratio, nicer meals, and more comfortable surroundings.
However, you will need to pay the difference between your council funding and what your choice of residential care home costs.
For example, if your local authority will only pay £500 each week but the home you have chosen is £700, then you will need to arrange for someone to pay the additional £200 in care fees.
You will not be able to afford to pay this if your assets are less than £23,250. The additional amount is usually paid by a third party (usually by a friend or relatives). It is called a ‘third party contribution’ or ‘top up fee’.
Your local council might increase the amount it’s willing to pay if:
It is really important that you first ensure you are getting all the support, benefits (eg. attendance allowance) and credits that you are entitled to, as older people can also receive specific, age-related support.
You then need to ensure that you look at all your wealth and savings and think carefully about how you can use them in the most efficient way.
There are a number of ways people pay for the cost of their care home:
– Use a deferred payment agreement – This is where your Local Authority effectively pays for your care and levies a cost against your home
The simple answer is YES.
Equity release can easily be used to pay for your home care (also known as domiciliary care or social care) and live-in care. However, releasing equity is more complicated if you are moving to a residential care home. One option you could investigate is using the proceeds to buy a care annuity.
You can read more about equity release calculators and lifetime mortgages on this site.
Here is a short video explaining how equity release works. You can also use the equity release calculator below to see how much you could receive.
By planning your finances early and efficiently, you can mitigate some of the impacts.
If you do your planning early enough, while you are still healthy and are not anticipating needing to pay for nursing care soon, it may also be possible to use a trust to transfer ownership of your home. Therefore, your home would not be counted towards the cost of your care.
Read our section on how to avoid care homes costs if this is of interest. We would strongly suggest you take professional advice if you are looking at this route.
Another option to consider may be getting respite care. This means that if you are caring for someone, you can get a carer to come and take your place for a short while. You can read about respite care and costs on this website. This could be cheaper than putting someone in a care home full time.
An alternative option to consider is receiving care in the home from a home care services. This means that you stay in your own house and you can have younger and older people come and look after you there (depending on your age of course).
This is increasingly becoming a popular option as this is much cheaper than going in to care home and allows you to remain in an environment where you are comfortable and familiar.
You can read more about live in care here. In our view, this type of care will take over from residential care, just as it brings a better experience for the person needing care.
If you do decide that care at home is a better option than there are a number of things that you can do to make your life much more comfortable. For example, the first thing that older people often do is get themselves a more comfortable chair.
Yes. If you are considering receiving domiciliary care, then one further funding option to consider would be releasing equity
a) allow you to stay at home
b) allow you to access cash tax-free from your home
c) allow you to use the money to modify your home to allow you to continue to live comfortably at home
This is increasingly becoming a popular option with older people. Home care is much cheaper than moving into residential care, and it allows you to remain in an environment where you are comfortable and familiar.
You can read more about live-in care here. In our view, this type of care will take over from residential care, just as it brings a better experience for the person needing care.
If you do decide that care at home is a better option, then there are a number of things that you can do to improve your quality of life. For example, the first thing that older people often do is get themselves a more comfortable chair.
Yes. If you are considering receiving domiciliary care, then one further funding option to consider would be releasing equity.