Home Care Funding in the UK
As more people in the UK choose to receive care in the comfort of their own homes, understanding how to pay for these vital services is a primary concern for many families. Proactive financial planning is essential to secure necessary care without facing overwhelming costs. This guide offers a comprehensive overview of the options for funding home care in the UK.
Home Care Funding Sources in the UK?
Funding for home care, also known as domiciliary care, comes from several sources. Your eligibility for financial support depends on your specific care needs and your financial situation. The main avenues for funding are:
Local Authority (Council) Funding
NHS Continuing Healthcare (CHC)
Self-Funding (including options like Equity Release)
Welfare Benefits
1. Local Authority Support (Social Care Funding)
If you require care but cannot afford the full cost, your local council may provide financial assistance. To determine your eligibility, you must undergo two assessments.
The Assessment Process
Care Needs Assessment: Everyone is entitled to a free care needs assessment from their local council, regardless of their financial status. This assessment identifies your specific care requirements. You can request one directly from your council’s adult social services department, or a GP or district nurse can make a referral with your permission.
Financial Assessment (Means Test): If the needs assessment concludes you have ‘eligible needs’, the council will assess your finances to see if you qualify for funding. This review includes your income (pensions, benefits) and capital (savings, investments). For home care, the value of your main property is not included in the means test.
What are the Capital Thresholds for Care Funding in England?
Financial thresholds determine how much your council will contribute. For the 2024/2025 financial year, the thresholds in England are:
Over £23,250 (Upper Threshold): You will be classified as a ‘self-funder’ and must pay for your own care.
Between £14,250 and £23,250: You will receive partial funding from the council but must contribute from your income. You will also pay a ‘tariff income’, which is a contribution from your capital calculated at £1 for every £250 you have over £14,250.
Less than £14,250 (Lower Threshold): Your capital will be disregarded, but you will still contribute from your eligible income.
The council must ensure your income does not drop below a set level, known as the Minimum Income Guarantee. For more detailed information, visit the NHS guide on council funding for home care.
Direct Payments
If you are eligible for council funding, you can opt for a Direct Payment. This is money paid directly to you, giving you the control to hire a personal assistant or choose a care agency that best suits your needs.
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2. NHS Continuing Healthcare (CHC)
Who is Eligible for NHS Continuing Healthcare?
NHS Continuing Healthcare (CHC) is a package of care fully funded by the NHS for individuals whose needs are primarily health-related. To qualify, an assessment must show you have “a complex medical condition and substantial and ongoing care needs.”
Eligibility: This is not dependent on a specific diagnosis but on the overall complexity, intensity, and unpredictability of your health needs.
Process: The process starts with a screening checklist, usually completed by a nurse or social worker. If the checklist indicates you may be eligible, a full assessment is conducted by a multidisciplinary team.
Benefit: CHC is entirely free of charge and is not means-tested.
For official guidance, refer to the GOV.UK page on NHS Continuing Healthcare.
3. Self-Funding Your Home Care
If you are not eligible for public funding, you are known as a ‘self-funder’.
Average Costs: The cost of home care varies by location and need but typically averages around £25-£32 per hour. It is crucial to contact several regulated homecare agencies to compare services and fees.
Employing a Carer Directly: While this can offer more control, it makes you an employer with legal duties, including contracts, tax, National Insurance, and pension contributions.
Equity Release: For homeowners aged 55 and over, equity release can unlock the tax-free funds tied up in your property to pay for care. However, this is a significant financial decision that will reduce your estate’s value and could affect your entitlement to means-tested benefits. It is vital to seek professional advice from a qualified financial adviser. The Equity Release Council is a good source for finding accredited advisers.
4. Essential Benefits to Support Home Care Costs
Claiming all the welfare benefits you are entitled to is a critical part of funding your care. These benefits are not typically means-tested and are paid regardless of your savings.
Attendance Allowance: For individuals over State Pension age who have a disability or illness requiring help or supervision. Find out more and apply on the GOV.UK Attendance Allowance page.
Personal Independence Payment (PIP): For individuals under State Pension age with a long-term health condition or disability. Details are available on the GOV.UK PIP page.
Carer’s Allowance: An allowance for people who spend at least 35 hours a week caring for someone with substantial caring needs. Check your eligibility at the GOV.UK Carer’s Allowance page.
For comprehensive advice and support, charities like Age UK and Carers UK offer free, expert guidance.
Key Considerations for Financial Planning
Deprivation of Assets: Intentionally giving away assets (savings or property) to avoid care fees can be deemed ‘deliberate deprivation of assets’. If this is the case, the council may calculate your contribution as if you still owned them.
Policy Uncertainty: The government previously delayed the implementation of an £86,000 cap on care costs. This highlights the importance of staying informed about potential policy changes that could affect your long-term financial planning.
Seek Professional Advice: The UK’s care funding system is complex. Seeking independent financial advice from a specialist in later-life planning is strongly recommended to navigate your options effectively. The MoneyHelper service provides free and impartial guidance.
Next Steps
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Reference and Useful Information Sources
Government and NHS Sources
GOV.UK – Paying for Social Care and Support
https://www.gov.uk/paying-for-social-careOfficial guidance on local authority funding, means testing, and financial thresholds.
NHS – Continuing Healthcare
https://www.nhs.uk/social-care-and-support/money-work-and-benefits/nhs-continuing-healthcare/
Details the eligibility, assessment process, and scope of NHS-funded care.
GOV.UK – Direct Payments
https://www.gov.uk/apply-direct-paymentsExplains how direct payments work for care users and carers.
GOV.UK – Attendance Allowance
https://www.gov.uk/attendance-allowanceEligibility and claim process for older adults needing extra help.
GOV.UK – Personal Independence Payment (PIP)
https://www.gov.uk/pipFor people under State Pension age with long-term conditions.
GOV.UK – Carer’s Allowance
https://www.gov.uk/carers-allowanceGOV.UK – Benefits Calculators
https://www.gov.uk/benefits-calculators
Charitable Organisations and Independent Advice
- Age UK – Paying for Care at Home
https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-homecare/
Extensive guides on home care costs, funding options, and benefits.
- Carers UK – Financial Support
https://www.carersuk.org/help-and-advice/financial-support/
Direct support and explanation of available financial help for unpaid carers.
- MoneyHelper – Equity Release Explained https://www.moneyhelper.org.uk/en/homes/buying-a-home/what-is-equity-release
Impartial guidance on equity release, eligibility, and risks.
- Society of Later Life Advisers (SOLLA)
https://societyoflaterlifeadvisers.co.uk/
Directory of financial advisers qualified to support care and retirement planning.
Frequently Asked Questions (FAQs)
In the UK, home care can be funded through local authority support (subject to a care needs and means assessment), NHS Continuing Healthcare for those with complex medical needs, and benefits such as Attendance Allowance, Personal Independence Payment (PIP), and Carer’s Allowance. If you’re not eligible for public funding, you may need to self-fund care or explore options like equity release.
No, the value of your home is not counted in the financial assessment if you’re receiving care in your own home. Unlike residential care, domiciliary care or in-home care funding assessments exclude your property’s value, so you won’t need to sell your home to qualify for local authority support.
Home care typically costs around £28 per hour, depending on location and care needs. You may be eligible for help through your local council, NHS Continuing Healthcare, or government benefits. Even if you’re paying privately, support like direct payments or benefits can offset some costs.
