.jpg)
.svg)
Care home funding refers to the various ways individuals and local authorities pay for residential, nursing, or dementia care. How you fund care depends on your capital assets, income, and care needs, and the rules differ depending on whether you live in England, Wales, or Scotland.
The system is not designed to be easy to understand. Rules vary by region, thresholds change year on year, and the difference between one funding route and another can be worth tens of thousands of pounds. This guide pulls everything together in one place, so your family knows what questions to ask and what to do next.
If you and your loved ones would like to know more about an Ashberry Care Home, book a visit today.
The average cost of residential care in the UK is around £800 to £1,100 per week, while nursing care typically ranges from £1,000 to £1,400 per week. Costs vary significantly by region, care type, and individual provider.
According to LaingBuisson's annual care market analysis, fees have risen consistently year on year, driven by staffing requirements, regulatory standards, and inflationary pressures.
The main care types and their associated cost ranges are:
.jpg)
Under the Care Act 2014, local authorities in England must fund care for anyone whose capital falls below the upper threshold of £23,250. Between £14,250 and £23,250, means-tested contributions apply. Below £14,250, capital is generally disregarded entirely.
In Wales, the equivalent legislation is the Social Services and Well-being (Wales) Act 2014. The capital threshold in Wales is currently £50,000, significantly higher than in England, meaning more people qualify for local authority support at an earlier stage.
To access local authority funding, an individual must first undergo two assessments:
The local authority will then agree to fund up to a set weekly rate for a suitable placement. If the chosen care home charges more than that rate, a top-up fee may apply, payable by a third party such as a family member. Our full guide to care home top-up fees explains who can pay, what the agreement must include, and what to do if the cost becomes unmanageable.
"Families often come to us having had no idea what the thresholds were. Once they understand how the means test works, they feel far more in control of the decision." Ashberry care home manager
A self-funder is someone who pays for their own care home fees because their capital exceeds the local authority threshold. In England this is £23,250; in Wales it is £50,000. Self-funders typically pay the full cost of their chosen home without any local authority subsidy.
Many families enter the care system as self-funders and transition to local authority support as assets deplete. Understanding when that transition is likely to occur and planning around it matters. When capital falls toward the threshold, the local authority needs to be notified well in advance so their assessment process can begin in time.
Self-funders should also know that certain benefits remain available regardless of personal wealth. Attendance Allowance, for example, is not means-tested. Our guide to benefits available to self-funders sets out what is still claimable and how to apply. And if you are approaching the point where your funds are running low, what happens when self-funding runs out covers the transition process step by step.
The value of your home is included in the financial assessment unless certain people continue to live there. If a spouse, civil partner, dependent child, or certain other qualifying individuals remain in the property, it must be disregarded from the means test entirely.
This is one of the most misunderstood areas of care funding. The rules around property disregards are set out in the Care and Support (Charging and Assessment of Resources) Regulations 2014.
Key disregards include:
Even where the property is initially disregarded, it may be assessed once the qualifying occupant leaves. Our article on protecting your home and assets as a spouse provides further detail, including what rights remain in place if circumstances change.
Families should also be aware of the rules around deprivation of assets. Deliberately transferring or giving away property or money to reduce the means-tested calculation is taken seriously by local authorities as they can treat those assets as though they still exist in full. The risks are significant and the 7-year rule is more complicated than most people realise.
A deferred payment agreement (DPA) is a formal arrangement with the local authority that allows the cost of care to be secured against your property, so you do not need to sell your home during your lifetime to fund your care.
Under the Care Act 2014, local authorities in England are required to offer deferred payment agreements to eligible individuals. The amount owed accumulates as a legal charge against the property and is repaid, typically from the sale of the home or from the estate, at a later date. Interest is charged on the deferred amount at a rate set by the local authority.
DPAs are a practical option for people who are property-rich but cash-poor, providing breathing space for families to make longer-term decisions without urgency. Our in-depth guide on deferred payment agreements covers eligibility in full, how interest accrues, and what happens when the agreement ends.
NHS Continuing Healthcare (CHC) is a package of care arranged and fully funded by the NHS for adults in England whose primary need is a healthcare need. It is not means-tested and is entirely separate from local authority social care funding.
CHC eligibility is assessed using the NHS Decision Support Tool, which evaluates an individual across 12 care domains including behaviour, cognition, communication, and nutrition. To qualify, a person must have a "primary health need", meaning their care needs arise principally from their health condition rather than social care needs.
Funding through CHC covers the full cost of care home fees including accommodation. Many families are not aware they may be entitled to it, and many eligible individuals are wrongly denied at the first assessment. Our guides on NHS Continuing Healthcare for care home residents and navigating NHS nursing care funding explain how to request an assessment, what to expect, and what to do if an application is declined.
.png)
NHS-Funded Nursing Care (FNC) is a contribution paid directly by the NHS to the care home to cover the cost of nursing care provided by registered nurses. In 2024/25, the standard rate is £235.88 per week in England.
FNC applies to people in nursing homes who do not qualify for full NHS Continuing Healthcare but whose needs still require input from registered nurses. It is not means-tested and is assessed separately from the local authority financial assessment, the nursing element of the fee is effectively removed from what the individual is asked to pay.
A Lasting Power of Attorney (LPA) for Property and Financial Affairs gives a named attorney the legal authority to manage someone's finances including paying care home fees, if they lose mental capacity to do so themselves.
Without a registered LPA in place, families may find themselves unable to access bank accounts, sell property, or manage care home fee payments on behalf of a loved one who lacks capacity. In such cases, a Court of Protection deputyship order would be required which could be a significantly longer and more expensive process.
Setting up an LPA while someone still has mental capacity is one of the most practical steps any family can take when planning ahead. Our guide to power of attorney and care home fees explains the different types of LPA and how they interact with the funding system.
"Setting up power of attorney before it's needed is something almost every family wishes they'd done sooner. Once someone loses capacity, the options narrow considerably." — Ashberry care home manager
The care costs cap, originally set at £86,000 under the Health and Care Act 2022, has been indefinitely delayed by the Government. As of 2025, no implementation date has been confirmed.
The cap was intended to limit the total amount any individual would need to spend on personal care over their lifetime, after which the state would fund ongoing care costs. Its future remains uncertain. Our article on the care home fees cap covers the history of the policy and what its continued absence means for families planning now.
Care funding rules and local authority rates vary considerably across the UK. We have produced detailed regional guides for families in specific areas:
For independent guidance, the following organisations provide authoritative, free information:
%20(1).png)
In England, you are expected to fund your own care if your total capital exceeds £23,250. Below £14,250, capital is largely disregarded. Between the two figures, a sliding scale contribution applies.
You may be able to avoid an immediate sale through a deferred payment agreement, whereby the local authority secures the debt against your property. If a qualifying person such as a spouse remains in the home, it may be disregarded from the means test entirely.
Local authority funding is means-tested and covers social care needs. NHS Continuing Healthcare is not means-tested and covers people whose primary need is a healthcare need. It is fully funded by the NHS and assessed separately.
Your own assets may affect the means test in limited circumstances, but local authorities cannot force a spouse to sell their main home. The property disregard rules and the provisions within the Care Act 2014 offer significant protections for remaining spouses.
When your capital falls below the upper threshold, you should inform the local authority and request a financial assessment. They will then fund care at their agreed rate going forward. Our guide on what happens when self-funding runs out explains the process in detail.
The Government legislated for an £86,000 lifetime cap on personal care costs under the Health and Care Act 2022, but implementation has been indefinitely postponed. There is currently no cap in force for most people in England.
Self-funders may still be entitled to Attendance Allowance, and in some circumstances Pension Credit. Our guide on benefits available to self-funders outlines what is available and how to apply.
There is no specific 7-year rule in care funding law, but local authorities can look back at financial transactions to determine whether assets have been deliberately reduced. Our guide on the 7-year rule for care home fees clarifies the actual legal position.
The right funding approach depends on your individual circumstances, location, care needs, and family situation. At Ashberry Care Homes, our experienced team can walk you through the options relevant to your situation and help you understand what to expect at each stage, without pressure or obligation.
We have homes across Herefordshire, Gloucestershire, the West Midlands, Wales, Surrey, and Cheshire.
Get in touch with our team today and let us help you find the right path forward.
At Ashberry Care Homes, we look after your loved ones with care focused on dignity, sensitivity and independence.
We understand the concerns that people have when choosing a care home either for themselves or for a loved one. In our care, residents and their families are at the heart of everything we do and are always treated with respect and consideration.
Keep up to date with recent news, events and services. You can unsubscribe at any time. Your data will not be shared with any third parties.
.png)
