Paying for care
Taking a few minutes to understand the costs and how to pay for the care can really help when it comes to making future decisions
The cost of care
Many people needing care find they’ll have to cover some or all of the costs themselves, which can be daunting. Thinking them through in advance will help you choose your next steps carefully. That can even stop you having to move to a new care provider later on if your care needs change.
In-home care costs
The United Kingdom Homecare Association (UKHCA) calculated a minimum price for homecare of £34.42 per hour. It covers the UK Living Wage for careworkers, and includes their travel time, mileage and wage-related costs. The rate also includes a minimum payment towards running a care business at a financially sustainable level.
Care home costs
Care home fees can be significant, though they will vary depending on where you live and what your needs are. You can expect to pay more than £1,000 per week, in fact the average weekly cost for a private payer in a residential care home is approximately £1,300 per week. This average increases to over £1,500 where nursing care is required.
Local authority care funding
What to expect from the financial assessment
The first step is to ask for a free care assessment from the social services department of your local authority.
What to expect from the financial assessment
Once your local authority has agreed your care needs, they’ll look into your finances to work out how much you should pay towards the cost. It could mean you’ll need to pay for none, part or all of your care, depending on your income, savings and property you own.
Only the finances of the person who needs care should be considered in the financial assessment.
Your savings, assets, and investments
One of the first questions you’ll be asked is whether you have more than £23,250 in capital assets. If the answer is yes, you’ll be considered a ‘self-funder’ and you’ll need to cover the full cost of your care.
The financial assessment will look at your income and assets, including:
- Savings, including ISAs
- Stocks and shares
- Second homes or buy-to-let properties
- Investments with a ‘cash-in’ value
- Your property if you’re moving to a care home.
If you have savings below £23,250 Then you may be able to get help to pay for care from your local authority.
Capital limits for local authority support in UK countries
‘Capital’ refers to the value of any savings or investments you have.
| England | Wales | Scotland | Northern Ireland | |
| Home Care Capital Limit | £23,250 | £24,000 | N/A (Free when assessed as needing care by your local authority) | N/A (Free when assessed as needing care by your local authority) |
| Care Home Capital Limit | £23,250 | £50,000 | £36,750 (But up to £260.30 p/w contribution to personal care costs regardless of finances) | £23,250 |
Your income from pensions, benefits and some other sources will be considered in a financial assessment. There are some types of income that won’t be counted, called ‘disregarded income’, and includes:
- Disability Living Allowance or Personal Independence Payment mobility components
- War Widows’ and Widowers’ special payments
- Charitable and voluntary payments
- Personal injury trust payments
- Awards of certain damages
- Any earnings from employment
The local authority should check you’re claiming all the financial support and benefits you’re entitled to when they do your assessment.
For care at home
After working out what income should be considered, you should be left with at least the Minimum Income Guarantee (MIG) after paying for care.
For a single person over State Pension age, the standard figure is £241.45 (£184.30 if you’re in a couple). This figure can be increased if you are also a carer. This is how much should be left over from your income after your rent, mortgage payments, ground rent and Council Tax payments are all taken care of.
For people aged 25 and over, the figure is £120.40 for a single person (£94.55 if you’re a member of a couple).
For people aged 18 to 24 the figure is £95.40 for a single person (£94.55 if you’re in a couple).
These rates can be increased if you are a carer but also if you have a disability.
In Wales, the MIG is calculated differently and is around £345 for a single person of State Pension age and £130 for someone of working age. In Scotland and Northern Ireland personal care at home is free if your local authority has agreed you need it, so there is no MIG.
For care in a care home
As part of your financial assessment, the local authority must ensure that you are left with a weekly Personal Expenses Allowance (PEA).
Your allowance is a minimum of £31.80 per week and can be used however you wish. Many people choose to spend it on day trips, magazines, cosmetics or snacks. If your allowance is not enough to cover these costs, then you can ask your local authority to consider increasing it.
In Scotland PEA is £35.90 per week and in Northern Ireland, it’s £27.19. In Wales, PEA is known as the Minimum Income Amount and is £46.35 per week.
How local authority care payments work
If your local authority agrees to help you pay for care, they’ll decide a personal budget that covers the care needs they’ve identified.
For residential care in a home, this is sometimes called the ‘usual cost’. Your local authority must make sure that at least one care home has availability to meet your needs within the budget they set.
If you’re granted funding for care, your local authority should give you a breakdown of how much they’ll contribute and how much you’ll be expected to pay. This total figure is your ‘personal budget’, which is the amount of money required to cover your care needs.
There are several ways of using your personal budget:
- A direct payment (where the money is given directly to you)
- A budget managed by the local authority
- Having your budget managed by a third party (such as a care provider)
- A combination of the above.
Most commonly, people ask the local authority to manage their budget and arrange their services. However, you can receive your budget in the way that suits you best.
In most cases, your local authority will arrange to pay your care home directly. If you or a family member need to pay something towards your care as well, your payments can be arranged with the local authority or the care home. Start by talking to your local authority to set it up.
Once a local authority has worked out what they’ll pay and how much you’ll need to chip in, there may still be a gap to cover the full cost of the care you want. So, you might be asked to find a ‘third party top-up’. This can’t come from your own savings; it needs to be paid by someone close to you, like a partner, family member or friend.
A local authority can only ever ask for top-ups if they’ve found a lower cost care home for you that meets all your assessed needs and has availability. If they can’t find one, they’ll need to pay to cover your current shortfall.
There are two situations where you can pay your own top-up:
- During the first 12 weeks in a care home (12-week property disregard) as a permanent resident, if you’re going to use your property to pay for your care.
- If you have a Deferred Payment Agreement. Where the local authority contributes to your care now, with repayment from the value of your property later.
Live-in care can be expensive, with prices from £800 to in excess of £1,600 per week, which means it’s unlikely that a local authority will fund the full cost. Instead, they might recommend a care home as a lower cost alternative. Or, they could give you a personal budget, which you can top up with your own money or with help from family to meet the cost of a live-in carer.
If you think your care needs wouldn’t be properly met in a care home, you can challenge the local authority’s decision not to pay for live-in care.
You may also wish to explore releasing equity from your home to help give you greater flexibility.
Find out if you could use the value of your home to pay for any shortfall for in home care by completing our Care Costs Calculator.
Please be aware, if you take equity out of your home, you may no longer be eligible for financial support from your local authority.
Depending on whether you need care at home or in a care home, you may be able to claim a disability benefit as well as support from your local authority. This is a non-means tested benefit for people aged 65 and over who have care and support needs.
Care at home
Attendance Allowance and other disability benefits can be considered in your financial assessment. This includes the daily living component of Personal Independence Payments or DLA.
The assessor must take into account any costs you have to pay because of disability and disregard these from your assessment. This is called ‘Disability Related Expenditure’. Some councils disregard a flat rate, but if you feel this isn’t enough to cover your costs, you can challenge it.
Care in a care home
If you’re receiving funding from the local authority and living in a care home, you won’t be able to claim Attendance Allowance. If you receive the Daily Living/Care component of PIP/DLA these payment will stop. If you’re using your property to pay for care through a Deferred Payments Agreement, you can carry on receiving these benefits.
Note that if you receive the mobility component of PIP or DLA then you can continue to receive this, even if you are funded by the local authority.
- Gardening
- Extra heating costs
- A special diet
- Community alarms (telecare services)
- Transport costs (for medical appointments and social contacts)
- Cleaning
- Buying and maintaining disability equipment
This is a non-exhaustive list and other costs may also be accepted.
How local authority care payments work
If your local authority agrees to help you pay for care, they’ll decide a personal budget that covers the care needs they’ve identified.
For residential care in a home, this is sometimes called the ‘usual cost’. Your local authority must make sure that at least one care home has availability to meet your needs within the budget they set.
If you’re granted funding for care, your local authority should give you a breakdown of how much they’ll contribute and how much you’ll be expected to pay. This total figure is your ‘personal budget’, which is the amount of money required to cover your care needs.
There are several ways of using your personal budget:
- A direct payment (where the money is given directly to you)
- A budget managed by the local authority
- Having your budget managed by a third party (such as a care provider)
- A combination of the above.
Most commonly, people ask the local authority to manage their budget and arrange their services. However, you can receive your budget in the way that suits you best.
In most cases, your local authority will arrange to pay your care home directly. If you or a family member need to pay something towards your care as well, your payments can be arranged with the local authority or the care home. Start by talking to your local authority to set it up.
Once a local authority has worked out what they’ll pay and how much you’ll need to chip in, there may still be a gap to cover the full cost of the care you want. So, you might be asked to find a ‘third party top-up’. This can’t come from your own savings; it needs to be paid by someone close to you, like a partner, family member or friend.
A local authority can only ever ask for top-ups if they’ve found a lower cost care home for you that meets all your assessed needs and has availability. If they can’t find one, they’ll need to pay to cover your current shortfall.
There are two situations where you can pay your own top-up:
- During the first 12 weeks in a care home (12-week property disregard) as a permanent resident, if you’re going to use your property to pay for your care.
- If you have a Deferred Payment Agreement. Where the local authority contributes to your care now, with repayment from the value of your property later.
Live-in care can be expensive, with prices from £800 to in excess of £1,600 per week, which means it’s unlikely that a local authority will fund the full cost. Instead, they might recommend a care home as a lower cost alternative. Or, they could give you a personal budget, which you can top up with your own money or with help from family to meet the cost of a live-in carer.
If you think your care needs wouldn’t be properly met in a care home, you can challenge the local authority’s decision not to pay for live-in care.
You may also wish to explore releasing equity from your home to help give you greater flexibility.
Find out if you could use the value of your home to pay for any shortfall for in home care by completing our Care Costs Calculator.
Please be aware, if you take equity out of your home, you may no longer be eligible for financial support from your local authority.
Care at home
If you own the home you’re living in, its value won’t be counted in your financial assessment. But if you’d prefer a more expensive package of care than your local authority is willing to pay for. There maybe other funding methods available, use our Care Costs Calculator to find out what options might be right for you.
Care in a care home
If you have less than £23,250 in savings but you own a property, then its value may be used to pay for your care. However, if it is occupied by a partner or certain family members then it may not be included in the financial assessment.
Care homes and the treatment of your property
The value of your home will be disregarded if it’s still being lived in by a:
- spouse, civil partner or unmarried partner
- family member over the age of 60
- family member who is deemed ‘incapacitated’ or living with a disability
- lone parent who is your estranged or divorced partner
- child of yours, under the age of 18
If you move into care but someone who cared for you still lives in your home, the local authority can choose to disregard your property. Local authorities should consider the effect that caring responsibilities have had on the carer. Particularly their employment opportunities and housing arrangements.
The 12-week property disregard
If you move into a care home and none of the property disregards apply, the local authority will take it into account to pay towards your care. However, they won’t use its value for 12 weeks from the date you first move into a care home as a permanent resident.
If you jointly own your property
If the financial assessment includes a property you own with somebody else, they’ll only consider your share. If nobody lives there, it’s likely they’ll value your share close to its market value. However, if one of the owners still lives in the property, the local authority will apply the ‘trust principle’ when they value your share. This means if you brought the property as a home and it’s still used as one by the other owner, each share may be worth little when assessed for care costs.
Deferred Payment Agreement
If you have a property and less than £23,250 in savings, you should be offered a Deferred Payment Agreement by your local authority. This often follows the 12 week disregard.
This means you don’t have to sell your home. Instead, the local authority will put a legal charge against your house so they can get back what they’ve paid towards your care. They'll charge interest on this amount, although it is typically minimal.
How local authority care payments work
If your local authority agrees to help you pay for care, they’ll decide a personal budget that covers the care needs they’ve identified.
For residential care in a home, this is sometimes called the ‘usual cost’. Your local authority must make sure that at least one care home has availability to meet your needs within the budget they set.
If you’re granted funding for care, your local authority should give you a breakdown of how much they’ll contribute and how much you’ll be expected to pay. This total figure is your ‘personal budget’, which is the amount of money required to cover your care needs.
There are several ways of using your personal budget:
- A direct payment (where the money is given directly to you)
- A budget managed by the local authority
- Having your budget managed by a third party (such as a care provider)
- A combination of the above.
Most commonly, people ask the local authority to manage their budget and arrange their services. However, you can receive your budget in the way that suits you best.
In most cases, your local authority will arrange to pay your care home directly. If you or a family member need to pay something towards your care as well, your payments can be arranged with the local authority or the care home. Start by talking to your local authority to set it up.
Once a local authority has worked out what they’ll pay and how much you’ll need to chip in, there may still be a gap to cover the full cost of the care you want. So, you might be asked to find a ‘third party top-up’. This can’t come from your own savings; it needs to be paid by someone close to you, like a partner, family member or friend.
A local authority can only ever ask for top-ups if they’ve found a lower cost care home for you that meets all your assessed needs and has availability. If they can’t find one, they’ll need to pay to cover your current shortfall.
There are two situations where you can pay your own top-up:
- During the first 12 weeks in a care home (12-week property disregard) as a permanent resident, if you’re going to use your property to pay for your care.
- If you have a Deferred Payment Agreement. Where the local authority contributes to your care now, with repayment from the value of your property later.
Live-in care can be expensive, with prices from £800 to in excess of £1,600 per week, which means it’s unlikely that a local authority will fund the full cost. Instead, they might recommend a care home as a lower cost alternative. Or, they could give you a personal budget, which you can top up with your own money or with help from family to meet the cost of a live-in carer.
If you think your care needs wouldn’t be properly met in a care home, you can challenge the local authority’s decision not to pay for live-in care.
You may also wish to explore releasing equity from your home to help give you greater flexibility.
Find out if you could use the value of your home to pay for any shortfall for in home care by completing our Care Costs Calculator.
Please be aware, if you take equity out of your home, you may no longer be eligible for financial support from your local authority.
Any properties you own but don’t live in, savings, stocks or shares will be counted in the assessment. You’ll be treated as having a 50% share in anything you jointly own, such as a joint bank account.
What capital is disregarded from a financial assessment?
- Some types of investment bond with life assurance elements attached
- Certain personal injury payments
- Money held for you in some types of trust
For savings below £23,250
If you have less than £23,250 in capital but more than £14,250 then you will be assumed to have an income equal to £1 for every £250 you have between these two amounts. For example, if you had savings of £16,050, there are seven full amounts of £250 and another partial amount towards your next £250. This means you would be assumed you have a ‘tariff income’ of £8 per week. The closer you get to £14,250 the lower this amount becomes.
In Wales, the capital limit for local authority support is £24,000 for care at home and £50,000 for care in a care home. There are no lower limits, so tariff income is not considered.
In Northern Ireland personal care at home is free when assessed and arranged by your local authority. Care in a care home is subject to the same capital limits and tariff income as England.
In Scotland the upper capital limit for local authority support in a care home is £35,500, the lower limit is £22,000. Care at home is typically provided free of charge when arranged through your local authority.
How local authority care payments work
If your local authority agrees to help you pay for care, they’ll decide a personal budget that covers the care needs they’ve identified.
For residential care in a home, this is sometimes called the ‘usual cost’. Your local authority must make sure that at least one care home has availability to meet your needs within the budget they set.
If you’re granted funding for care, your local authority should give you a breakdown of how much they’ll contribute and how much you’ll be expected to pay. This total figure is your ‘personal budget’, which is the amount of money required to cover your care needs.
There are several ways of using your personal budget:
- A direct payment (where the money is given directly to you)
- A budget managed by the local authority
- Having your budget managed by a third party (such as a care provider)
- A combination of the above.
Most commonly, people ask the local authority to manage their budget and arrange their services. However, you can receive your budget in the way that suits you best.
In most cases, your local authority will arrange to pay your care home directly. If you or a family member need to pay something towards your care as well, your payments can be arranged with the local authority or the care home. Start by talking to your local authority to set it up.
Once a local authority has worked out what they’ll pay and how much you’ll need to chip in, there may still be a gap to cover the full cost of the care you want. So, you might be asked to find a ‘third party top-up’. This can’t come from your own savings; it needs to be paid by someone close to you, like a partner, family member or friend.
A local authority can only ever ask for top-ups if they’ve found a lower cost care home for you that meets all your assessed needs and has availability. If they can’t find one, they’ll need to pay to cover your current shortfall.
There are two situations where you can pay your own top-up:
- During the first 12 weeks in a care home (12-week property disregard) as a permanent resident, if you’re going to use your property to pay for your care.
- If you have a Deferred Payment Agreement. Where the local authority contributes to your care now, with repayment from the value of your property later.
Live-in care can be expensive, with prices from £800 to in excess of £1,600 per week, which means it’s unlikely that a local authority will fund the full cost. Instead, they might recommend a care home as a lower cost alternative. Or, they could give you a personal budget, which you can top up with your own money or with help from family to meet the cost of a live-in carer.
If you think your care needs wouldn’t be properly met in a care home, you can challenge the local authority’s decision not to pay for live-in care.
You may also wish to explore releasing equity from your home to help give you greater flexibility.
Find out if you could use the value of your home to pay for any shortfall for in home care by completing our Care Costs Calculator.
Please be aware, if you take equity out of your home, you may no longer be eligible for financial support from your local authority.
Couples and care funding
Only the finances of the person who needs care can be taken into account in the financial assessment. Your partner’s finances shouldn’t be considered. The guidance given to local authorities says that they have:
“no power to assess couples or civil partners according to their joint resources. Each person must therefore be treated individually.”
If you have joint savings, the value will be divided equally between you. If one of you owns more than the other, you can show evidence of this to the local authority for the financial assessment.
Frequently Asked Questions
These can help you understand the rules for couples and what support may be available.
For as long as one of you lives in your home, its value can’t be used to pay for the other person's care. If the person living at home moves out, then the your partner’s share of the property can be considered from that day forward.
If your partner decides to downsize after you've moved into a home, they should be able to use some of your share of your home's value to cover the cost of the move. If there’s any money left over, it will likely be considered as belonging to you and be used to pay for your care.
The local authority aren’t allowed to consider your partner's finances when they assess your ability to pay for care. It’s up to your partner whether they contribute anything from their personal finances to cover the cost.
If care is being paid for by the local authority, it has a duty to arrange a care home that meets your needs without anyone else having to contribute. But your partner can choose to chip in extra to make up the shortfall of a more expensive care home if they want to – this is called a ‘third party top-up’.
If you're moving into a care home and are married or in a civil partnership, you can give half of any private or occupational pension over to your partner.
Your other half should also check whether they’re entitled to any means-tested benefits. The local Adult Social Care team should be able to look at which benefits they could receive at the same time they support you to get the right care in place.
Care Concierge
If you would like some guidance on finding a new care provider or exploring funding options, you can talk with our Care Concierge team.
