Care home costs: questions answered

Question 1

How much extra does dementia care in a care home cost?

Accepted Answer

Dementia care adds about £65 a week to a typical residential care home fee and around £30 a week to a nursing home fee in England, according to The Care Panel's Q4 2026 Index. The extra reflects higher staffing, specialist training and adapted environments. Individual homes may charge much more for complex behaviour or one-to-one support, so ask each home how it sets dementia fees.

Question 2

Which part of England has the most expensive care homes?

Accepted Answer

London has the most expensive care homes in England, and the North East has the cheapest, according to The Care Panel's Q4 2026 Index. The South East and East of England are also above average. Differences reflect land and property costs, staff wages and local demand. A care home in a neighbouring cheaper area can cost hundreds of pounds a week less for similar care.

Question 3

What do care home fees usually include?

Accepted Answer

Care home fees usually include the room, meals and drinks, laundry, heating and lighting, personal care and help with medication, cleaning and a basic activities programme. Nursing home fees also cover registered nursing care. The contract should list exactly what is included. Check whether things like toiletries, newspapers, outings or continence products are included or charged separately.

Question 4

What extras do care homes charge for?

Accepted Answer

Common extras are hairdressing, chiropody, newspapers and magazines, phone or TV packages, toiletries, outings, escorting residents to hospital appointments and dry cleaning. Some homes charge for one-to-one support or a larger room. Consumer law guidance from the Competition and Markets Authority says all charges should be made clear before a person moves in, so ask for a full price list.

Question 5

Do self-funders pay more than council-funded residents in care homes?

Accepted Answer

Yes, often. In many care homes, people who pay their own fees are charged more than the rate the council pays for a resident with similar needs in the same home. Homes say council rates do not cover their costs, so self-funders effectively subsidise them. A self-funder can ask the council to arrange their placement, which may secure a lower rate, though councils may charge an arrangement fee.

Question 6

Who pays for a care home in England?

Accepted Answer

Who pays depends on a council means test and on health needs. People with capital above £23,250 pay their full fees. Those with less get help from the council but contribute most of their income. If someone has a primary health need, NHS continuing healthcare pays the full cost, and nursing home residents may get NHS-funded nursing care towards the nursing element.

Question 7

Will I have to pay care home fees if I have less than £14,250?

Accepted Answer

Your capital will not be counted if it is below £14,250, but you will still be expected to pay towards the fees from your income, such as your State Pension and pension credit. The council pays the rest of its agreed rate. You keep a personal expenses allowance of at least £31.80 a week, and any top-up for a more expensive home must be paid by someone else.

Question 8

How much do I pay towards a care home with savings between £14,250 and £23,250?

Accepted Answer

If your capital is between £14,250 and £23,250, the council counts £1 a week of 'tariff income' for every £250, or part of £250, above £14,250. This is added to your actual income when working out your contribution. For example, £18,250 of savings creates £16 a week of tariff income. The council pays the rest of the fee up to its agreed rate.

Question 9

Is my house counted when paying for a care home?

Accepted Answer

Usually yes, unless someone else still lives there. For a permanent care home stay in England, the home's value is counted as capital, but it is ignored for the first 12 weeks and indefinitely while a partner, a relative aged 60 or over, or an incapacitated relative lives there. The home is never counted if you are receiving care in your own home.

Question 10

What is a deferred payment agreement for care home fees?

Accepted Answer

A deferred payment agreement is a loan from the council, secured on your home, that pays care home fees so you do not have to sell the property during your lifetime. Councils in England must offer one to people who meet the criteria, mainly having less than £23,250 in other capital. Interest and admin fees are charged, and the debt is repaid when the house is sold or from the estate.

Question 11

Can a care home resident pay their own top-up fee?

Accepted Answer

Only in limited cases. A resident in England can pay their own top-up during the 12-week property disregard, while they have a deferred payment agreement, or if they receive aftercare under section 117 of the Mental Health Act. Otherwise the top-up must come from a third party, such as a family member, because the resident's own income is already counted towards their contribution.

Question 12

What happens if the family can no longer pay a care home top-up?

Accepted Answer

If a third-party top-up stops, the council remains responsible for the placement and must make sure the person's needs are met. It may try to negotiate the fee with the home, find a cheaper home that meets the person's needs, or agree an alternative after a reassessment. Moving someone is not automatic and should consider their wellbeing. Tell the council early if payments become difficult.

Question 13

How often do care home fees go up?

Accepted Answer

Most care homes increase fees once a year, often in April, to reflect rising wages and running costs. Increases have often been higher than inflation in recent years. The contract should explain when and how fees can rise, and consumer law guidance says terms allowing increases must be clear and fair. Ask each home how much its fees have risen over the past few years.

Question 14

Can a care home increase fees without warning?

Accepted Answer

No. Consumer law guidance from the Competition and Markets Authority says care homes must set out clearly in the contract when and how fees can change, and give residents reasonable advance notice of any increase. A term letting a home raise fees by any amount at any time may be unfair and unenforceable. If a resident's needs increase, the home should reassess and explain any change.

Question 15

Do care homes ask for a deposit?

Accepted Answer

Some care homes ask self-funders for a deposit or advance payment, often equal to a few weeks' fees. Consumer law guidance says any deposit must be made clear upfront, be reasonable, and the contract should explain when and how it is refunded. Some homes ask for proof that a self-funder can pay for a set period. Council-funded residents are not usually asked for a deposit.

Question 16

Can a care home charge fees after a resident dies?

Accepted Answer

Yes, but only for a short, clearly stated period. Competition and Markets Authority advice says a fair approach is either to charge for no more than three days after the death, counted from the day after, or to charge until belongings are cleared with a maximum of 10 days. Charging should stop if the room is re-let sooner, the family can ask for more time, and fees paid in advance for later days should be refunded promptly, usually within 28 days.

Question 17

How long does a family have to clear a care home room after a death?

Accepted Answer

The contract should say, within limits set by Competition and Markets Authority advice. A home can either charge for a fixed period of up to three days after the death, or charge until the room is cleared but for no more than 10 days, both counted from the day after death. The family can ask for extra time in writing, and any charges for that, or for removing and storing belongings, should be set out in the contract in advance.

Question 18

When should I contact the council if care home savings are running down?

Accepted Answer

Contact the council around three months before savings are expected to fall to £23,250, because assessments and paperwork take time. The council will do a care needs assessment and a financial assessment, then agree a personal budget. Asking early gives time to sort out any top-up and avoids a gap where the care home expects full fees while council funding is not yet in place.

Question 19

Is there a cap on care home costs in England?

Accepted Answer

No. A cap on lifetime care costs was planned to start in October 2025, but the government cancelled it, so there is no cap in force in England. People with capital above £23,250 pay their full care home fees for as long as they need care, apart from any NHS funding they qualify for. The means-test limits of £23,250 and £14,250 continue to apply.

Question 20

Does the NHS pay for care home fees?

Accepted Answer

Only in specific cases. If someone has a primary health need, NHS continuing healthcare pays all care home fees, with no means test. Nursing home residents not eligible for that may get NHS-funded nursing care, a weekly payment towards the nursing part of their fees. Short-term NHS intermediate care or reablement after hospital is free for up to six weeks. Otherwise the council means test applies.

Question 21

How can I pay for long-term care if I am self-funding?

Accepted Answer

Self-funders usually pay from a mix of income (pensions, Attendance Allowance), savings and investments, and the value of their home, through selling, renting it out or a deferred payment agreement. Some buy an immediate needs annuity to cover the gap between income and fees for life. Getting regulated independent financial advice from a specialist care fees adviser helps compare these options.

Question 22

Is pension income used to pay care home fees?

Accepted Answer

Yes, most income, including State Pension and private pensions, counts towards care home fees under the council means test. The resident keeps a personal expenses allowance of at least £31.80 a week. If they have a spouse or civil partner at home, half of any private or occupational pension can be disregarded if it is passed to that partner, which protects the partner's income.

Question 23

Does my spouse's income count when paying for my care home?

Accepted Answer

No. The council means test in England looks only at the resident's own income and capital, not their partner's. The council cannot make a spouse or civil partner pay towards fees, although they can choose to pay a top-up. Jointly held money is usually treated as split equally, so half of a joint account counts as the resident's capital.

Question 24

Can I give away money to avoid paying care home fees?

Accepted Answer

Giving away money or property to avoid care fees is called deprivation of assets, and the council can treat you as still owning it. If the main reason for a gift or transfer was to reduce care charges, the council may count its value in the means test and can, in some cases, recover fees from the person who received it. There is no set time limit on what can be checked.

Question 25

Do care home fees include VAT?

Accepted Answer

No. Care home fees in the UK are exempt from VAT when the care is provided by a CQC-registered provider, so residents do not pay VAT on their weekly fees. Some extras supplied by third parties, such as hairdressing or chiropody, may include VAT. If an invoice shows VAT on core care fees, ask the home to explain the charge.

Question 26

Can I use equity release to pay for a care home?

Accepted Answer

Equity release is rarely suitable for paying care home fees, because most lifetime mortgages require the home to be sold once the borrower moves permanently into care. It is more often used to fund care at home. For a care home, a deferred payment agreement from the council, renting the property or selling it are more common options. Take regulated financial advice before deciding.

Question 27

Is council-funded care in a care home free?

Accepted Answer

No. Even when the council funds a care home place, the resident must contribute most of their income, such as State Pension and Pension Credit, after keeping a personal expenses allowance of £31.80 a week. The council pays the rest up to its agreed rate. Care is fully free only through NHS continuing healthcare, short-term intermediate care or reablement, or section 117 aftercare under the Mental Health Act.

Question 28

Why do care home fees vary so much between homes in the same area?

Accepted Answer

Fees in the same area can differ by hundreds of pounds a week because of room size and en-suite facilities, the age and design of the building, staffing levels, the type of care registered, and the mix of self-funders and council residents. Luxury homes with extra facilities charge premium rates. Higher fees do not always mean better care, so compare CQC ratings alongside price.

Question 29

Does a care home have to tell me its fees before I move in?

Accepted Answer

Yes. Consumer law guidance from the Competition and Markets Authority says care homes must give clear information about fees, including what is included, extras, deposits and how fees may change, early enough to help people compare homes. This should normally be on the home's website and in writing before a contract is signed. Hidden or surprise charges may break consumer law.

Question 30

Do care homes charge while a resident is in hospital?

Accepted Answer

Yes, most care homes continue charging, sometimes at a reduced 'retainer' rate, while a resident is in hospital so their room is kept. The contract should set out how long the room will be held and what is charged. If the council funds the place, it normally keeps paying for a set period, and the resident's own contribution may change during longer hospital stays.

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