Residential Care Home Costs In The UK
Finding a care home for yourself or an older loved one, and organising the move into full-time residential care, can be an emotional process.
Understanding how care is funded and what costs are involved – such as care home fees for the elderly – will help you to navigate the process more quickly and easily. At Aria Care we want to help you feel confident about your choices regarding care home financial planning.
Who Pays For Care Home Costs?
Unlike healthcare in the NHS, adult social care isn’t free for everyone at the point of use. If you live in England, Wales or Northern Ireland, and you have severe or complex health needs, NHS Continuing Healthcare may cover all of your nursing home fees. (Scotland has different care arrangements, called Hospital Based Complex Clinical Care, which is only available to people in hospital.)
However, if your health needs aren’t severe or complex, you will then need to have a financial assessment – or means test. This will show whether you qualify for local authority funding and, if so, how much you are entitled to receive.
They will create a report about your needs and the type of care that would best suit you. If your capital is over the pre-set limits, you will be expected to fund all of your care yourself, which is called self-funding.
What Are The Factors Affecting Cost Of A Residential Care Home?
Care home costs in the UK vary depending on where you live, what type of care you need, your savings and property, and the care home provider.
Finding – and funding – care for yourself or a loved one is a very personal process. And, unlike healthcare delivered in the NHS, the care of older people in the UK is not free to everyone. The funding support that you are entitled to will depend on your financial circumstances as well as where you live in the UK.
To work out whether you qualify for state funding and how much you may be entitled to, your local authority will carry out a financial assessment and will look at:
Your regular income, including:
- Pensions
- Benefits
- Earnings
Your capital, including:
- Cash savings
- Investments
- Business assets
- Land
- Property (your home will not be included if your partner still lives there).
Local authorities follow national guidelines to determine how much you should contribute. These include assessments of savings, investments, and assets – all crucial elements in care home financial planning.
How will your income and capital affect the funding you receive?
| The amount of capital you have | Your entitlement to funding |
| Less than £14,250 | Your capital is disregarded and you will be entitled to the maximum support available. But you will still have to contribute most of your income. |
| Between £14,250 and £23,250 | You are entitled to some financial help but will be expected to pay £1 per week for every £250 or part of £250 you have over £14,250. But you will still have to contribute most of your income. |
| More than £23,250 | You will be expected to pay for all your care yourself from income and capital, known as self-funding |
Capital limits vary from region to region: Contact the social services department of your local authority to find out whether you’re eligible for funding. If you have savings and assets of more than the amount in this table, you’ll have to pay for your own care:
| Region | Savings threshold for local authority funding in 2019/20 |
| England | £23,250 |
| Wales | £50,000 |
| Scotland | £28,750 |
| Northern Ireland | £23,250 |
How Much Does Residential Care Really Cost?
The average cost of residential care in the UK can vary significantly. Factors influencing the cost include:
- Whether you are receiving permanent or temporary care
- Whether the home is run by the local authority or an independent provider
- Your county or region, for example, the personal care you receive in a care home in Scotland is free if you’re over 65
- Individual care home fees
- Rising living costs
New Changes From October 2025
In September 2021, the UK Government announced reforms to how residential care home costs in England will be calculated and capped. Although originally set for October 2023, the changes will now begin in October 2025.
Key Asset Thresholds:
- Less than £20,000 – No contribution from assets, only from income
- £20,000 to £100,000 – Sliding scale contribution
- Over £100,000 – Full responsibility for funding care
Care Home Fees Cap 2025
The reforms introduce a care home fees cap in 2025 – a lifetime limit of £86,000 on personal care costs in England. After this, the local authority will pay any additional eligible care costs. However, this cap applies only to personal care and not to living costs such as food, accommodation, or utilities.
You can find all of this information including FAQs and helpful contact information in our “Guide to Funding the Cost of Care”.
If you would like to know more about care homes and funding full-time residential care for yourself or a relative, we’re here to help. Please call our friendly Aria Care team on 0808 281 5102 or visit www.ariacare.co.uk.
