Care costs explained: who actually pays for care in England
Care funding in England is not one system with one rule. It is four systems with different tests, and which one you land in decides whether you pay everything, something, or nothing at all. This guide sets out the routes in the order they should be checked, with the 2026/27 figures that actually apply.
The three questions that decide who pays
Before anyone talks about money, three things have to be established, and they have to be established in this order. Get the order wrong and families routinely pay for care that somebody else was responsible for.
1. Is this care needed because of a health condition?
If someone's primary need is a health need, funding may be the NHS's responsibility through NHS Continuing Healthcare. CHC covers the full cost of care, wherever it is delivered, and it is not means-tested at all. It does not matter how much money the person has. It is assessed against the nature, intensity, complexity and unpredictability of their needs — not against a diagnosis and not against a bank balance.
2. Does the person need care from a registered nurse?
If they are in a nursing home but do not qualify for full CHC, the NHS may still pay a fixed weekly contribution towards the nursing element. This is called NHS-funded Nursing Care, or FNC. From 1 April 2026 the standard rate is £267.68 a week, with a higher rate of £368.24 a week for people who were already on it under the older banding. It is paid directly to the home, so check your invoice actually reflects it.
3. Only then: what does the financial assessment say?
If neither NHS route applies, care becomes social care, and social care is means-tested by the local authority. That is the point at which the capital limits, income and property come into it — and not a moment before.
Why the order matters so much
Families are frequently told to “sort out the finances” on day one. Doing that first anchors everybody, including the professionals in the room, on the assumption that the family is paying. Once a self-funded placement is signed, getting a CHC assessment taken seriously becomes noticeably harder — not because the rules change, but because nobody is asking the question any more.
- Has an NHS Continuing Healthcare checklist been completed and dated?
- If a nursing home is involved, has NHS-funded Nursing Care been applied?
- Has a local authority care needs assessment been carried out and written up?
- Has Attendance Allowance been claimed? It is not means-tested.
- Is the property genuinely counted, or should it be disregarded?
- Has anyone explained a deferred payment agreement?
How care actually gets paid for
Most care packages end up being funded by one of these four routes, or by a combination of them. They are not alternatives you choose between — they are tests you pass or fail, in order.
NHS Continuing Healthcare
The NHS pays the full cost of care, including accommodation in a care home, where the person has a “primary health need”. Not means-tested. Reviewed regularly. Most often missed at hospital discharge. How CHC works →
NHS-funded Nursing Care (FNC)
A fixed weekly NHS payment towards the nursing element of a nursing home placement. £267.68 standard rate from April 2026. Paid to the home, not to you. Not means-tested.
Local authority funded care
Following a needs assessment and a financial assessment, the council arranges and part-funds care. You contribute what the assessment says you can afford from income and capital.
Self-funding
You pay the full fee. This is where most families end up, and it is the group least protected — nobody is checking the fee, the contract or the annual increases on your behalf. Get an independent care search →
Key care funding figures for 2026/27 (England)
These are the statutory figures confirmed by the Department of Health and Social Care for the 2026 to 2027 financial year. They apply in England; Wales, Scotland and Northern Ireland set their own limits.
| What it is | 2026/27 figure | What it means in practice |
|---|---|---|
| Upper capital limit | £23,250 | Above this, you are expected to meet the full cost of care from your own resources. |
| Lower capital limit | £14,250 | Below this, capital is ignored and only income is considered. |
| Tariff income | £1 per week for every £250 | Applied to capital between the two limits. It is a notional charge, not interest you actually receive. |
| Personal Expenses Allowance | £31.80 per week | The minimum a care home resident must be left with from their income after paying their assessed contribution. |
| Attendance Allowance (lower rate) | £76.70 per week | Frequent help or supervision during the day, or supervision at night. Not means-tested. |
| Attendance Allowance (higher rate) | £114.60 per week | Help or supervision day and night, or nearing the end of life. Not means-tested. |
| NHS-funded Nursing Care (standard) | £267.68 per week | Paid by the NHS directly to a nursing home towards registered nursing input. |
| NHS-funded Nursing Care (higher) | £368.24 per week | Applies to people who remained on the older higher band. |
| NHS Continuing Healthcare | Full cost | No means test, no capital limit, no contribution from the person. |
On average care fees: we do not publish average weekly care costs, because the figures quoted across the internet are wildly inconsistent and none of them will be your fee. What matters is the fee in the contract in front of you. Put that number into the care fees calculator and you will get an answer that means something.
The financial assessment, step by step
Needs assessment first
The council assesses what care is needed. This is free and available to everyone, regardless of savings. It produces the written statement of need everything else hangs on.
Capital is counted
Savings, investments, second properties and, in some circumstances, the main home. Personal possessions and the value of a life insurance policy are not counted.
Income is counted
State and private pensions, most benefits, annuity income. Some income is fully or partly disregarded, and the rules differ between care at home and a care home.
Protected amounts applied
In a care home, the Personal Expenses Allowance. At home, the Minimum Income Guarantee, which protects a floor of weekly income after charges.
A contribution is set
You should receive this in writing with a breakdown. If you do not understand how it was reached, ask for the calculation, not the conclusion.
The four issues that cost families the most
The property, and whether it should be counted at all
The value of the home is disregarded entirely for care provided at home. For a permanent care home move it may still be disregarded — for example where a spouse or partner, a relative over 60, or a relative who is disabled continues to live there. There is also a mandatory 12-week property disregard at the start of a permanent placement in many cases. Families sell houses they did not need to sell, and it is very difficult to undo.
Top-up fees, and who is allowed to pay them
If the council is funding a placement and a family wants a home that costs more than the council's rate, a third party may pay the difference. What should not happen is a resident being asked to top up their own council-funded placement out of protected income, or a family being told a top-up is compulsory when a suitable placement at the council rate exists. Ask to see the list of homes available at the council's rate before agreeing to anything.
Deliberate deprivation of assets
Giving away money or property to avoid care fees can be treated as if you still owned it. There is no fixed time limit on how far back a council can look. This is an area where the right advice — from a properly regulated professional — is worth far more than the cost of it. We are not regulated to give that advice, and we will say so.
Annual fee increases
The number families sign up to is rarely the number they pay two years later. Ask, before signing, what the increase has been in each of the last three years and what triggers a re-banding. A home that raises fees 9% a year is a fundamentally different financial proposition from one that raises them 4%.
- What exactly does the weekly fee include?
- What is charged separately — chiropody, hairdressing, escorted appointments, incontinence products?
- How much notice is given of a fee increase, and how much have fees risen in each of the last three years?
- What happens to the fee if needs increase and a re-banding is triggered?
- Is NHS-funded Nursing Care being deducted from the fee, or added on top?
- What are the terms if the placement ends, or if the person dies?
Care costs: the questions families actually ask
Do I have to sell the house to pay for care?
Not necessarily, and often not at all. The home is never counted for care provided in your own home. For a permanent care home move it may be disregarded — for example where a spouse, a relative aged 60 or over, or a disabled relative still lives there. Where it is counted, a deferred payment agreement can allow fees to be paid from the eventual sale rather than immediately. Get the position confirmed in writing before anything is put on the market.
What happens when savings drop to £23,250?
You should contact the local authority before you reach it, not after. Councils are not obliged to backdate funding to the point at which you became eligible, and they will want to carry out their own needs assessment first. Give them at least three months' notice. If the placement costs more than the council's usual rate, a third-party top-up may be needed to stay there, so this is worth planning for early.
Is care at home cheaper than a care home?
Up to a point. Home care is usually charged by the hour or the visit, so it is cheaper at low levels of need and can become more expensive than residential care once someone needs several visits a day, waking nights or two carers. The funding rules also differ: the value of the home you live in is never counted for care at home, and the Minimum Income Guarantee protects a floor of your income.
Can the council make my children pay for my care?
No. There is no legal obligation on adult children to pay for a parent's care in England. The only way family money becomes involved is voluntarily, usually through a third-party top-up to fund a more expensive placement than the council will pay for.
What is the difference between residential and nursing care?
Residential care provides personal care — help with washing, dressing, meals, medication and daily living. Nursing care provides all of that plus a registered nurse on site. Nursing homes cost more, but a nursing placement also opens up NHS-funded Nursing Care, and it raises the question of whether full NHS Continuing Healthcare should be assessed.
Should I claim Attendance Allowance if I am self-funding?
Yes. Attendance Allowance is not means-tested, has nothing to do with savings or income, and is paid at £76.70 or £114.60 a week depending on the level of help needed. Large numbers of self-funders never claim it because nobody tells them to. It can also unlock extra Pension Credit or Council Tax Reduction.
What is a deferred payment agreement?
An arrangement with the council that lets you delay paying care home fees using the value of your home, with the debt settled later — usually when the property is sold. Interest and administration fees apply. It is not a way of avoiding the cost, but it can avoid a forced sale at a bad moment. Ask the council directly whether you qualify.
We were told we are self-funders and no assessment is needed. Is that right?
No. Anyone who appears to need care and support has a right to a local authority needs assessment regardless of their finances. Being told otherwise is one of the most common and most expensive pieces of misinformation families receive. Ask for it in writing.
How far ahead should we be planning?
Earlier than feels necessary. The families who do best are the ones who established the funding position, put Lasting Powers of Attorney in place and understood local costs before anything went wrong. Once there is a crisis, the choices narrow very quickly.
Can you tell us what to do with our money?
No — and be careful of anyone who can't say the same. We do not provide FCA-regulated financial advice and we do not carry out reserved legal activities. What we do is establish the care position, the funding routes and the evidence, then tell you plainly when a regulated adviser or solicitor is the right next call.
Are you claiming everything you could be?
Five questions. No email, nothing stored. The result names the benefits worth checking, and the two rules families get caught by.
Work out your own position
Care fees calculator
Put in the real numbers and see the weekly and annual position.
NHS Continuing Healthcare
The funding route most often missed, and how the assessment works.
The 2-minute Care Check
Six questions to work out which part of the system you are in.
Funding Entitlement Check
A written, independent view of what you should and should not be paying.
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