Care home funding in England works through a mix of self-funding, local authority support, and NHS contributions, and which route applies depends on a financial assessment and, for nursing care, a health assessment too. This guide explains how each part works, without quoting figures that change every year. For current figures and a full breakdown, see our Fees & Funding page.
Who pays for care home fees in England?
It depends on your relative’s savings, assets, and care needs. Someone with assets above the local authority’s upper capital threshold is usually expected to self-fund. Someone below the threshold may receive local authority support toward the cost, following a financial assessment (often called a means test). Anyone with an assessed nursing need also receives a fixed NHS contribution, regardless of their finances, and some people qualify for full NHS funding.
What is the local authority means test and how does it work?
The means test looks at savings, investments, and, in many cases, property, to work out whether someone qualifies for financial help toward their care fees. There are two threshold levels: below the lower one, the local authority contributes more; between the lower and upper thresholds, the resident contributes on a sliding scale alongside the council; above the upper threshold, the resident is expected to self-fund in full. The exact thresholds are set nationally and reviewed periodically, so we do not quote figures here as they change. Your local authority’s adult social care team can confirm current thresholds and carry out the assessment.
Does the family home count in the means test?
Sometimes. If a spouse, partner, or certain other qualifying relatives still live in the property, its value is usually disregarded. If nobody meets those conditions, the property’s value may be included, though a “12-week property disregard” gives a temporary window immediately after moving into care where the property is not counted, giving families time to decide whether to sell it or explore other options such as a deferred payment agreement.
What is NHS Funded Nursing Care (FNC)?
NHS Funded Nursing Care is a fixed weekly contribution the NHS pays directly to a nursing home toward the cost of the nursing (clinical) element of care, for residents who have been assessed as needing care from a registered nurse. It applies regardless of how the rest of the fees are funded, and it is separate from Continuing Healthcare. It does not apply to residential-only care, since residential homes do not provide nursing care.
What is NHS Continuing Healthcare (CHC) and how is it different from FNC?
NHS Continuing Healthcare is full funding for a person’s entire care package, arranged and paid for by the NHS, for people whose primary need for care is a health need rather than a social care need. It is assessed separately from the local authority means test and is not means tested at all: financial circumstances do not affect eligibility. The assessment process usually starts with a checklist screening, followed by a full multidisciplinary assessment if the checklist indicates it may be needed. CHC is less common than FNC and the assessment can take time, so it is worth starting the conversation with a GP, hospital discharge team, or the home’s manager as early as possible.
What happens if a self-funder’s money runs out?
If savings and assets fall towards the local authority’s upper threshold, it is important to contact the council’s adult social care team in good time, ideally before funds are close to running out, to arrange a financial assessment before the position becomes urgent. If the assessment confirms the person now qualifies for support, the local authority will contribute going forward. There can be a difference between what a local authority is willing to pay and what a home charges self-funders, known as a “top-up”, which in most cases must be paid by a third party such as a family member rather than the resident themselves. It is worth discussing this directly with the home and the council early on.
What is a deferred payment agreement?
A deferred payment agreement is an arrangement with the local authority that lets someone use the value of their property to cover care fees without having to sell it immediately. The council effectively lends the money against the property’s value, and the amount is repaid later, usually when the property is eventually sold. It can be a useful bridge for people whose money is tied up in a property they are not ready to sell, and it is arranged through the local authority, not the care home.
Do residential care and nursing care work differently for funding?
The local authority means test process is the same for both. The difference is that nursing care also brings in NHS Funded Nursing Care as an additional, non-means-tested contribution, and nursing residents may also be assessed for Continuing Healthcare. Residential care funding relies on self-funding and/or local authority support only, since NHS clinical contributions apply to nursing care.
Where can I get a full explanation with current detail?
Our Fees & Funding page sets out how funding works for both residential and nursing care in more detail, including how to start a conversation with the local authority. It does not list fee amounts, since these vary by home and are best discussed directly.
Speak to a person
Albert House Nursing Home, Weston-super-Mare: 01934 622869. Bridge House Residential Home, Frampton Cotterell, near Bristol: 01454 772888. Or visit our contact page to talk it through with a real person, with no pressure and no obligation.