Care Home Fee Increases and Top-Up Fees

Fee increases and top-ups

Two of the most common letters a family receives, and two of the least well understood. A fee increase is usually contractual and often defensible. A top-up is frequently neither. This page sets out how to tell the difference, and what to ask before you agree to either.

DRAFT — AWAITING REVIEW·To be reviewed and bylined before publishing·Sources: GOV.UK, NHS, our editorial standards

£23,250Upper capital limit for 2026/27

In writingAsk for the affordable alternative

Third partyA top-up is not paid from the resident’s money

TOP-UPS

When a top-up is proper, and when it is not

The rule is simpler than the practice. Where a local authority is meeting someone’s assessed needs, it must be able to offer at least one place that meets those needs within the amount it has said it will pay. A top-up is for a family that wants something more than that — a particular home, a bigger room, a location closer to relatives.

What happens instead, very often, is that a family is shown one home, told the council’s rate does not cover it, and asked to make up the difference. No alternative is named. Nobody says out loud that the assessed needs could be met more cheaply somewhere else, because frequently there is nowhere else with a vacancy.

That is not a preference. That is the council’s duty being funded by a relative, and it is worth challenging — politely, in writing, and before anything is signed.

The patterns we see most often

No alternative was ever named

The clearest sign that a top-up should not have been requested. If the council cannot point to a home within its rate that meets the assessed needs and has a vacancy, the shortfall is its problem, not yours.

The top-up is meeting a need

If the more expensive home is the only one that can actually meet an assessed need — a particular kind of dementia support, say, or a specialist nursing requirement — then the higher cost is the council’s to meet.

Nothing was ever written down

A verbal arrangement made at the door of a care home during a discharge is not a top-up agreement. There should be a written agreement covering the amount, how it is reviewed, and what happens if it stops.

It came from the resident’s account

A third-party top-up is, by definition, paid by a third party. There are narrow exceptions. If the money is coming from the resident, ask which exception is being relied on.

It rises with the fee, unannounced

When the home’s fee goes up, the shortfall goes up, and the top-up rises with it. Families who agreed to £50 a week are often paying far more three years later without ever having agreed to an increase.

It was agreed during a hospital discharge

The worst possible moment to make a financial commitment that may run for years. Anything agreed under discharge pressure is worth revisiting once things settle.

What to do before you pay it

Find the clause

Go back to the contract and find what it says about increases: how much notice, what date, whether any cap applies, and whether the home has to explain the reason.

Check the notice actually complies

Wrong date, short notice, or an increase applied mid-term where the contract says annual review — these happen more often than you would expect, and pointing them out politely usually resolves them.

Ask what it is for

You are entitled to an explanation. Staffing, the National Living Wage, energy, agency cover, insurance. A home that cannot explain its own increase is a home worth watching more closely.

Check the funding side has kept up

If NHS-funded Nursing Care applies, the standard rate rose to £267.68 a week from 1 April 2026. If the council contributes, its rate is usually reviewed each April too. An increase in the home’s fee does not automatically mean an increase in what you pay.

Then decide, in writing

Accept, query, or dispute — but do it in writing and keep the reply. If you dispute it, keep paying under protest rather than withholding, which tends to weaken your position.

What is fixed, and what is not

The statutory figures below are set by government for 2026/27 and do not vary by area. Everything else on your invoice does.

What it is	2026/27 figure	Why it matters here
Upper capital limit	£23,250	Above this the person meets the full cost themselves, and no council rate or top-up question arises yet.
Lower capital limit	£14,250	Below this, capital is ignored entirely and only income is considered.
NHS-funded Nursing Care	£267.68 per week	Paid by the NHS directly to a nursing home. Check the invoice reflects it, especially after a fee increase.
Personal Expenses Allowance	£31.80 per week	The minimum a resident must be left with. A fee increase cannot be allowed to eat into it.
The council’s usual rate	Set locally	Not statutory, varies by area and by type of placement, and is the number the whole top-up question turns on.
The home’s weekly fee	Set by the home	Not statutory either. It is a commercial price, and it is negotiable more often than families assume.

What to actually write

Most of this is won or lost by whether it is in writing. Homes and councils respond very differently to a letter than to a phone call, not because anyone is acting in bad faith, but because a letter has to be answered by someone with authority.

On a top-up, the sentence that does the work is: “Please confirm in writing which placement within your usual rate was available and able to meet the assessed needs at the time of the placement.” Very often the answer changes the position.

On a fee increase: “Please confirm the contractual provision under which this increase is being applied, the notice period it requires, and the reason for the increase.”

Neither is aggressive. Both are entirely reasonable requests, and both create a record.

Questions about fees and top-ups

What is a third-party top-up, exactly?

It is an extra weekly payment, usually made by a relative, where a family chooses a care home that costs more than the local authority has assessed as necessary to meet the person’s needs. It is legitimate where it is genuinely paying for a preference. It is not legitimate where it is being used to plug a gap between what a placement costs and what the council is prepared to pay.

Can the council make us pay a top-up?

No. Where a council is meeting someone’s needs it must be able to offer at least one placement that meets those assessed needs within its own budget. If it cannot name a home that meets the assessed needs and has a vacancy, a top-up should not be required at all. Ask for the affordable alternative in writing.

Can a top-up come out of the resident’s own money?

Generally no. A top-up is a third-party payment, made by someone other than the resident, precisely because the resident’s own resources have already been assessed. There are limited exceptions — during a twelve-week property disregard, and under a deferred payment agreement — where a first-party top-up can be allowed. If someone is proposing to take it from the resident, ask which exception applies.

How much notice do we get of a fee increase?

Whatever the contract says, and that is the whole answer. Most care home contracts set a notice period and an annual review date. Some cap increases, most do not. If the increase does not follow the contract — wrong notice, wrong date, no explanation — say so in writing before you pay it.

Fees have gone up more than inflation. Is that allowed?

It may well be. Care home costs are driven by staffing, and staff costs have risen faster than general inflation for several years. What you are entitled to is an explanation, notice in line with the contract, and consistency with what you were told when you signed. Ask what the increase is for, and how it compares with the increases applied to other residents.

What happens if we cannot pay the top-up any more?

Tell the council and the home in writing, early. The council must review, and where the top-up cannot be sustained the outcome may be a move to a placement within the council’s rate — which is why the affordable alternative matters so much at the start. Falling behind quietly is the worst version of this.

Does a top-up affect the twelve-week property disregard?

It can. During the twelve-week disregard the person is being treated as though the property does not count, and a first-party top-up may be permitted in that window. It is a common point of confusion and worth getting in writing rather than assuming.