Care home funding is one of the most opaque, badly explained, and consequential decisions families make — and yet most people only learn the rules at the moment they need them, which is also the moment they have the least time to absorb them. This guide is meant to give you the plain-English version. We can’t give you financial advice, and you should always check the current numbers with a regulated adviser or with your local authority, but we can walk you through what the system actually looks like in 2026, and what families almost always get wrong.
Start with the basics. In England, if your savings and assets are over £23,250, you’ll be expected to pay for your own care in full. That’s called self-funding. If your savings and assets are below £14,250, the local authority will pay for your care — subject to contributions from your income, which we’ll come to. Between those two numbers, you’re on a sliding scale. These thresholds have been frozen for years, which means inflation has been quietly pushing more and more people into self-funding.
The first thing families ask is: does my house count? The answer is, it depends. If your relative is moving into a nursing home permanently, and they own a home, the value of that home is included in their savings for the financial assessment — with some important exceptions. If the home is still occupied by a spouse, a child under 18, a relative aged over 60, or a disabled relative, then it’s disregarded. If it’s empty, it’s included after the first 12 weeks. This is one of the biggest pinch points families hit, and it’s worth understanding before the move happens, not after.
If your relative is going to be self-funding, you’ll be looking at fees that vary widely depending on the home, the region, and the level of care needed. In our part of the West Midlands, nursing home fees typically range from around £1,200 to £1,800 per week as of 2026. That’s £62,000 to £94,000 a year. The fee is determined by the home, not the council, and it usually reflects the actual cost of care — staffing ratios, food quality, building maintenance, registered nurse on duty 24/7. Don’t be surprised if homes charging less also have lower staffing.
If your relative is going to be council-funded, the picture is different. The council has a duty to find a placement that meets their assessed needs, but they have a fixed budget. The council’s standard rate may be lower than the home’s actual fee. When that happens, the family is asked to make up the difference. This is called a “top-up” or “third-party contribution.” The rules around top-ups are strict — the resident themselves cannot pay the top-up (because if they could, they wouldn’t be council-funded), so it has to come from a relative or someone else. Many families don’t understand this until it’s too late.
There’s a third stream of funding that’s separate from both self-funding and council-funding, and it’s the one most worth understanding because it can pay for everything. It’s called NHS Continuing Healthcare, or CHC. If your relative’s primary need is a health need rather than a social care need — and dementia, complex medication regimes, behavioural issues, or end-of-life care can all qualify — the NHS will pay for their entire care home placement, regardless of their savings. CHC is means-tested only by clinical need, not financial means. We’ve written a separate post on this.
Even if your relative doesn’t qualify for full CHC, they may qualify for “NHS-funded nursing care,” which is a flat-rate contribution from the NHS to the cost of nursing care in a nursing home (not a residential home). This was £235.88 per week in 2024/25 and is reviewed annually. It comes off the top of the weekly fee. Every nursing home should be screening every nursing resident for this. If your home hasn’t, ask.
Now the financial assessment. If your relative is going to be council-funded or partly council-funded, social services will do what’s called a financial assessment. They’ll look at savings, investments, property, pensions, benefits, and income. They’ll calculate what your relative can afford to contribute. The result is a weekly contribution that comes off their income and pension. They’ll be left with a small amount of personal allowance — £30.65 per week as of 2024/25 — which is what they have to spend on hairdressing, chiropody, toiletries, the newspaper. It’s not generous.
One area where families almost always have questions is gifts and deprivation of assets. If your mum gave you £30,000 three years ago, can the council still treat that money as hers? Sometimes, yes. The council has the power to treat a deliberate transfer of assets as if it never happened, if they believe the purpose was to avoid care fees. There’s no time limit on this — the seven-year rule from inheritance tax doesn’t apply here. What matters is intent. If your mum gave you the money before there was any reasonable expectation she’d need care, you’re fine. If she gave it to you the week before her dementia diagnosis, you’re not. This is a grey area and worth speaking to a solicitor about if it applies to you.
What about the home? If your relative owns a property and is moving into a nursing home, the council will offer something called a “deferred payment agreement,” which means the council pays your fees and recoups the money from the eventual sale of the house. This stops families from having to fire-sell a property in a crisis, and it can be a very useful tool. It accrues interest, and there are administrative fees, but for most families it’s better than borrowing or selling under pressure.
Lasting Power of Attorney is the single most important piece of paperwork you can have in place, and it has to be done while your relative still has mental capacity. There are two kinds: one for property and finance, and one for health and welfare. Get both. The cost is modest. The alternative — applying for deputyship through the Court of Protection after capacity has been lost — is slow, expensive, and stressful. We’ve seen families spend £3,000 and six months on a deputyship application when an LPA done two years earlier would have cost a tenth of that and taken a fortnight.
If you’re at the point of having to organise care urgently, here’s what we’d suggest. First, contact your local council’s adult social care team and request a needs assessment. This is your relative’s legal right. The council has a duty to do it within a reasonable timeframe. Second, contact the council’s financial assessment team in parallel — they can do their work even before the needs assessment is finished. Third, if your relative is in hospital, ask the discharge team about “intermediate care” or “reablement” placements, which are short-term, NHS-funded placements that give everyone breathing room.
Fourth, if your relative has complex health needs, ask explicitly for a Continuing Healthcare screening assessment (the Checklist). The NHS has a duty to consider every patient for CHC. If you’re not given a Checklist, ask why not. The Checklist is a screening tool — it doesn’t mean you’ll qualify, but it triggers a full assessment if you score above a threshold. Many families don’t know to ask for it, and as a result, miss out on funding they’re entitled to.
Fifth, get advice. Age UK offers free information and a helpline. Independent Age has excellent factsheets. SOLLA (Society of Later Life Advisers) accredits financial advisers who specialise in care funding. A SOLLA adviser is worth talking to if you have significant assets — they can advise on things like immediate-needs annuities, which are a way of converting a lump sum into a guaranteed income for life that covers care fees, often more efficiently than just drawing down savings.
And one more piece of advice. Don’t be embarrassed to talk about money with the care home itself. We have these conversations every day. We can tell you exactly what our fees are, what they include, what the CHC pathway looks like, what happens if your relative’s needs increase. We’ve seen every funding combination there is over twenty-five years. A home that won’t talk about money openly is a home with something to hide.
Aldridge Court Nursing Home is on Little Aston Road, Aldridge, Walsall WS9 0NN. We’re family-run, twenty-five years on the same site, rated Good by the CQC. We accept self-funded, council-funded, and CHC-funded residents. We’re happy to talk you through the financial picture before you commit to anything. Drop in any time, or call 01922 455731. The first conversation is free, confidential, and not a sales pitch.
One last thing on funding. The picture is changing slowly. The cap on care costs — the so-called Dilnot reforms — has been pushed back repeatedly, and was last scheduled to be introduced and then deferred again. The political consensus on social care funding remains fragile, and major reform is unlikely in the short term. What that means in practice is that families have to plan with the rules as they are, not with the rules as they might be. Don’t wait for reform. Plan now, with realistic assumptions. If your relative has assets approaching the upper threshold, talk to a specialist financial adviser about an immediate-needs annuity. If they have a property, talk to the council about a deferred payment agreement. If they have complex needs, push for a Continuing Healthcare assessment. None of these are tricks. They’re entitlements, properly accessed.