Funding Care in the UK: Who Pays for What? A Complete Guide

Understanding Care Funding in the UK

One of the most confusing aspects of the UK care system is understanding who pays for care. Unlike the NHS, social care is not free at the point of use—many people have to pay towards or fully fund their own care.

This comprehensive guide explains the different funding routes, eligibility criteria, and what the recent reforms mean for you.

The Key Funding Sources

There are four main ways care can be funded in the UK:

1. NHS Continuing Healthcare – Fully funded by the NHS
2. Local Authority Funding – Means-tested support from your council
3. Self-Funding – Paying for your own care
4. Mixed Funding – A combination of the above

Let's explore each in detail.

NHS Continuing Healthcare (CHC)

What Is CHC?

NHS Continuing Healthcare is a package of ongoing care arranged and funded solely by the NHS. If you qualify, all your care costs are covered—whether that's in your own home, a care home, or a nursing home.

Key point: CHC is based on your health needs, not your financial situation. It's completely free regardless of how much money or assets you have.

Who Qualifies?

To qualify for CHC, you must have a "primary health need"—meaning your main needs are health-related rather than social care needs.

Eligibility is assessed against 12 care domains:

Domain	What It Covers
Behaviour	Challenging behaviour requiring management
Cognition	Memory, understanding, decision-making
Psychological/emotional	Mental health needs
Communication	Ability to communicate needs
Mobility	Ability to move independently
Nutrition	Eating, drinking, weight management
Continence	Bladder and bowel control
Skin integrity	Pressure sores, wound care
Breathing	Respiratory needs
Drug therapies	Complex medication regimes
Altered states of consciousness	Seizures, diabetic episodes
Other significant needs	Anything not covered above

Each domain is scored as:

• No needs
• Low
• Moderate
• High
• Severe
• Priority (in some domains)

You don't need to score highly in every domain—having one or two domains rated as Priority or Severe, or multiple High ratings, could indicate a primary health need.

The Assessment Process

1. Checklist screening: Usually completed by a healthcare professional (e.g., hospital discharge team, district nurse). If positive, you proceed to full assessment.

2. Decision Support Tool (DST): A multidisciplinary team (MDT) completes a detailed assessment of all 12 domains.

3. Local panel review: The completed DST goes to an NHS panel who makes the final funding decision.

4. Decision: You'll receive a written decision. If eligible, a care package is arranged and funded by the NHS.

Timeframes: The checklist should be completed within 28 days of an apparent need being identified. The full DST should be completed within 28 days of the checklist. In practice, delays are common.

If You're Not Eligible

If you don't qualify for full CHC but have some health needs, you may qualify for:

• NHS-funded Nursing Care (FNC): A contribution towards nursing costs in a nursing home (currently £219.71 per week in England)
• Joint funding: NHS and local authority share costs
• Section 117 aftercare: Free support after detention under the Mental Health Act

Challenging Decisions

You can appeal if you disagree with a CHC decision:

1. Local review: Request the Integrated Care Board (ICB) to reconsider
2. NHS England Independent Review: If still unhappy after local resolution
3. Parliamentary and Health Service Ombudsman: For unresolved complaints

Important: Seek independent advice. Organisations like Beacon (formerly the Continuing Healthcare Alliance) offer specialist support.

Local Authority Funding

How It Works

If you don't qualify for CHC, your local council may help pay for your care. Unlike CHC, local authority support is means-tested—they assess both your care needs and your financial situation.

Care Needs Assessment

Anyone can request a care needs assessment from their local council. The assessment determines:

• What care and support needs you have
• Whether those needs meet the national eligibility threshold
• How those needs affect your daily life

National eligibility criteria (England): Your needs must arise from a physical or mental condition and significantly impact your ability to achieve at least two of these outcomes:

• Managing and maintaining nutrition
• Maintaining personal hygiene
• Managing toilet needs
• Being appropriately clothed
• Being able to make use of your home safely
• Maintaining a habitable home
• Developing and maintaining family or other relationships
• Accessing and engaging with work, training, education
• Making use of facilities and services in the community
• Carrying out caring responsibilities

Financial Assessment (Means Test)

If you're eligible for care support, the council will assess what you can afford to pay.

Capital thresholds (England 2025/26):

Capital Level	What Happens
Above £23,250	You pay full cost (self-funder)
£14,250–£23,250	You contribute from capital (tariff income)
Below £14,250	Capital is disregarded in financial assessment

Tariff income: For every £250 of capital between £14,250 and £23,250, you're treated as having £1 per week of income.

Income assessment: Your income (pensions, benefits, etc.) is also assessed. You'll be left with a Personal Expenses Allowance (£28.25 per week for care home residents) or a Minimum Income Guarantee (for people living at home).

What Counts as Capital?

Usually included:

• Savings and investments
• Property (if not occupied by certain people)
• Shares and stocks
• Land

Usually excluded:

• Your main home (if your spouse/partner, or certain others, still live there)
• Personal possessions
• Surrender value of life insurance
• Certain compensation payments

Deprivation of Assets

If you've deliberately given away assets to avoid paying for care, the council can treat you as still having them. This is called deprivation of assets and can include:

• Gifts to family members
• Transferring property
• Extravagant spending

The council considers whether avoiding care costs was a significant motivation—not necessarily the only motivation.

Self-Funding Care

When You Self-Fund

You'll pay for your own care if:

• Your capital exceeds £23,250 (in England)
• You choose not to involve the local authority
• You want services beyond what the council would provide

What Self-Funders Pay

Self-funders often pay more than local authorities for the same care:

Care Type	Local Authority Rate	Private/Self-Funder Rate
Home care (per hour)	£18–£24	£22–£35
Residential care (per week)	£600–£800	£800–£1,200
Nursing home (per week)	£800–£1,100	£1,000–£1,500+

Why the difference? Councils commission care at volume, negotiate rates, and often pay below the true cost of care. Providers make up the difference by charging self-funders more—a practice called cross-subsidisation.

Self-Funder Rights

From October 2023 in England, self-funders have the right to ask their local authority to arrange their care home placement. This could give access to lower, council-negotiated rates.

However, implementation has been patchy, and not all councils actively support this right.

Care Cap and Reformed Means Test

Background

The government has announced reforms to the care funding system, though implementation has been delayed several times.

The Care Cap

A lifetime cap on care costs was proposed at £86,000. Once you've spent this amount on eligible care costs, the state would fund your ongoing care.

What counts:

• Your personal contribution to care costs
• Not accommodation costs (food and lodging)
• Not NHS contributions

What doesn't count:

• Top-ups for more expensive care
• Accommodation in care homes
• Care funded by the local authority

Reformed Means Test

The proposed thresholds (when implemented):

• Upper capital limit: £100,000 (up from £23,250)
• Lower capital limit: £20,000 (up from £14,250)

This would mean more people qualify for some state support.

Current Status

As of January 2026, these reforms have been repeatedly delayed. The current thresholds (£23,250 upper limit) still apply in England. Check the latest government announcements for updates.

Funding Care in Different Nations

Care funding rules vary across the UK:

Scotland

• Free personal care: Anyone assessed as needing personal care receives it free (currently worth £234 per week at home, more in care homes)
• Free nursing care: Nursing costs also covered
• Capital threshold: Different limits apply

Wales

• Weekly cap: Maximum charge of £100 per week for non-residential care
• Capital thresholds: Similar to England but under review

Northern Ireland

• Nursing home care: Nursing costs funded by Health and Social Care Trusts
• Personal care: Means-tested with different thresholds
• Domiciliary care: Charges apply but often lower than England

Practical Steps to Take

1. Get Assessed

If you or a family member may need care:

• Request a needs assessment from your local authority
• Ask about NHS Continuing Healthcare if there are significant health needs
• Don't assume you won't qualify—always get assessed

2. Understand Your Options

• Consider all funding routes before committing
• Self-funding doesn't mean you can't get council-arranged care
• CHC eligibility can change—request reassessment if health deteriorates

3. Plan Ahead

• Consider how you'll fund future care needs
• Look into insurance products (though options are limited)
• Take legal advice on property and asset planning—but don't deprive yourself of assets

4. Get Expert Help

Consider seeking advice from:

• Age UK: Free, independent advice on care funding
• Citizens Advice: General support on benefits and rights
• SOLLA-accredited advisers: Society of Later Life Advisers—specialists in care funding
• Independent financial advisers: For care fees planning
• Solicitors: For Lasting Powers of Attorney, wills, and asset protection

Useful Resources

• Gov.uk Care and Support – Find your local council
• NHS CHC Checklist – Official information
• Age UK Care Costs – Independent advice
• Can the NHS Pay for My Care? – Our detailed CHC guide
• Care Prices in Your Area – Local rate information

Summary

Care funding in the UK is complex, with different rules depending on your health needs, financial situation, and where you live. Key takeaways:

1. NHS Continuing Healthcare is fully free but requires a primary health need
2. Local authority support is means-tested—assets above £23,250 mean you self-fund
3. Self-funders often pay more than councils for the same care
4. Planned reforms could change thresholds and introduce a care cap—watch for updates
5. Always get assessed—don't assume you won't qualify for support

Understanding your options and getting early advice can save thousands of pounds and significant stress during an already difficult time.

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Last updated: January 2026. Funding rules and thresholds change regularly. Always verify current information with official sources or seek independent advice.