Care Home Fees: Costs and Who Pays

Care home fees are what a resident, their family or the state pays for a place in a residential or nursing home. In England, whether you pay yourself depends mainly on a means test of your income and capital, with an upper capital limit of £23,250 and a lower limit of £14,250 for 2026 to 2027.

Above the upper limit you are generally treated as a self-funder and meet the full cost. Below the lower limit your capital is left out and you contribute from income only. Between the two, you pay a sliding contribution. This guide sets out typical costs, how the test works, where your home fits in, and how NHS funding and earlier planning can affect the picture. Figures are current as at June 2026 and subject to change.

How much do care home fees cost?

Care home fees vary widely by region, by the level of care and by whether nursing is included. Residential care costs less than nursing care, and nursing homes that provide dementia support tend to cost the most. Location matters too, with fees in London and the South generally higher than in the North. The figures below are typical market averages rather than a quote for any particular home.

Typical market averages from Which?, care home fees, 2026. Actual fees depend on the home and region, and are subject to change. These are illustrative averages, not a quote.

Who pays for care home fees?

Three main sources can pay towards a care home place: the individual (self-funding from income and capital), the local authority (following a needs assessment and a means test), and the NHS (where health needs are high enough to qualify for continuing healthcare). Many people fall into more than one category over time, for example self-funding at first and later qualifying for council support as capital falls.

• Self-funding. Those with capital above the upper limit generally pay the full cost themselves.
• Local authority support. The council may contribute after a care needs assessment and a financial assessment, depending on income and capital.
• NHS continuing healthcare. Where someone has complex, ongoing health needs, the NHS may fund the full package, and this is not means tested (NHS, continuing healthcare, as at June 2026).

How the care home fees means test works

Once a council agrees that someone needs residential care, a financial assessment looks at their income and capital against two thresholds. For 2026 to 2027 in England the upper capital limit is £23,250 and the lower capital limit is £14,250 (gov.uk, charging circular 2026 to 2027, subject to change). Capital includes savings, investments and, in many cases, the value of a property.

In the middle band a tariff income applies: the council treats £1 per week of assumed income for every £250 of capital between the two limits. A resident is also generally left with a Personal Expenses Allowance, set at £31.80 per week for 2026 to 2027, that cannot be taken to meet fees (gov.uk, charging circular 2026 to 2027, subject to change).

NHS continuing healthcare and funded nursing care

Where someone has a complex, ongoing health need, they may qualify for NHS continuing healthcare, under which the NHS funds the whole care package. Eligibility depends on assessed health needs rather than a diagnosis, and it is not means tested, so income and savings are not taken into account (NHS, continuing healthcare, as at June 2026). Separately, a resident in a nursing home who does not qualify for full continuing healthcare may receive NHS-funded nursing care, a contribution towards the nursing element of their fees. Assessments for these can be requested, and many people ask about them when nursing needs are significant.

Care fees planning and later-life arrangements

Care fees planning means arranging later-life affairs with the possible cost of care in mind, in a way that stays within the rules. It is not about removing assets to avoid a future assessment: councils can look at whether capital has been given away deliberately to reduce fees, known as deprivation of assets, and can treat such capital as if the person still held it. Sensible steps focus on making sure the right documents, allowances and income arrangements are in place.

Planning here is about understanding how the rules apply and keeping sensible options open, not about deliberately putting assets beyond a means test.

Common elements include a valid will, a lasting power of attorney so someone can manage finances if capacity is lost, and considering how care costs interact with inheritance. Because the same assets can face both care costs and inheritance tax, and because administering an estate later involves probate, many people look at these together within a wider estate planning guide. Given the amounts involved and the risk of deprivation-of-assets challenges, this is an area where it can be worth discussing your position with a qualified professional before acting.

Care home fees in Scotland, Wales and Northern Ireland

This guide describes England. The rules and thresholds differ across the UK. Wales uses a single, higher capital limit for residential care, set at £50,000, above which a person generally self-funds (gov.wales, residential care capital limit, as at June 2026, subject to change). Scotland runs its own system, with different capital thresholds and free personal and nursing care for those assessed as needing it, so the numbers there are not the same as in England. Northern Ireland operates a broadly similar means-tested model to England through Health and Social Care Trusts. Because the figures and rules differ, it can be worth checking the position for the relevant nation.

Frequently asked questions