As the cost of care homes in the UK continues to rise, many families seek financial assistance to make long-term care affordable. Navigating the options can be challenging, but understanding available funding sources, from government grants to private insurance, can ease the financial burden and help families plan for their loved ones’ care. Here, we explore five key financial assistance options to consider when covering UK care home costs.
1. Local authority funding
What is local authority funding?
Local authority funding is financial support provided by councils to help cover the costs of care homes for eligible individuals. The amount of assistance depends on the individual’s financial situation, including income, savings, and property value.
How it works:
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- Means-tested assessment: To determine eligibility, the local authority conducts a means-tested financial assessment. This assessment examines assets and savings. If total assets fall below a certain threshold (currently £23,250 in England), the individual may qualify for partial or full funding.
- Care needs assessment: The local authority also performs a care needs assessment to confirm the level of care required. Funding is only provided if the person meets both the financial and care criteria.
Eligibility criteria:
- Total assets under £23,250
- A care needs assessment indicating the necessity of residential care
Benefits of local authority funding:
- Reduced costs: For eligible individuals, this funding can significantly reduce care costs or cover them entirely.
- Continued support: The local authority periodically reviews funding eligibility, ensuring ongoing support if financial circumstances remain unchanged.
2. NHS Continuing Healthcare (CHC) funding
What is NHS Continuing Healthcare (CHC)?
- NHS Continuing Healthcare is a funding option available to individuals with complex, ongoing health needs. This funding covers the full cost of care, including residential and nursing care home fees, and is provided by the NHS rather than local authorities.
How it works:
- Eligibility assessment: Eligibility for CHC funding is based on an assessment of the individual’s health needs, focusing on the complexity, intensity, and unpredictability of their condition.
- Care setting: CHC funding covers care in various settings, including care homes, nursing homes, and even at-home care.
Eligibility criteria:
- The individual must have substantial ongoing health needs that go beyond what local authority funding covers.
- A multidisciplinary team performs an assessment using the NHS CHC checklist and Decision Support Tool (DST).
Benefits of NHS CHC funding:
- Comprehensive coverage: If eligible, CHC funding covers all care costs, removing the financial burden from families.
- Healthcare-focused: CHC funding is ideal for individuals whose care needs are primarily health-related, such as those with severe physical or mental health conditions.
3. Attendance allowance
What is attendance allowance?
Attendance Allowance is a non-means-tested benefit for individuals aged 65 and over who need help with personal care due to a physical or mental disability. This allowance is designed to help cover the cost of care and can be used in conjunction with other funding sources.
How it works:
- Eligibility based on care needs: Eligibility depends on the level of care needed, rather than financial means. There are two rates: a lower rate for those needing care during the day or night, and a higher rate for those needing care throughout the day and night.
- Payment structure: Attendance Allowance is paid directly to the individual, and they can use it to cover personal care costs or contribute toward residential care fees.
Eligibility criteria:
- Age 65 or older
- Need for personal care due to a physical or mental disability
Benefits of attendance allowance:
- No means test: Since it’s not means-tested, individuals with higher savings or income may still qualify.
- Flexible use: Recipients can choose how to spend the allowance, whether on care home fees or other personal care needs.
4. Private health insurance and long-term care insurance
What is long-term care insurance?
Long-term care insurance policies are designed to cover the cost of care, whether at home or in a care home, providing a safety net for individuals concerned about future care needs. Some private health insurance plans may also offer partial coverage for care home expenses.
How it works:
- Policy purchase: Individuals can purchase a long-term care insurance policy while they are in good health, ideally before any significant care needs arise.
- Premium payments: Policyholders pay regular premiums, and if they need long-term care, the insurance will cover a portion or all of the costs depending on the policy terms.
Eligibility criteria:
- Eligibility and premium rates depend on age, health status, and the type of coverage chosen.
- Policies must usually be purchased well in advance, as some providers may not cover pre-existing conditions.
Comparing Care Home Funding Options in the UK
| Funding Option | Eligibility | What It Covers | Key Benefit |
|---|---|---|---|
| Local Authority Funding | Assets under £23,250 + care needs assessment | Personal care costs, sometimes partial residential fees | Reduces or eliminates care fees for low-asset individuals |
| NHS Continuing Healthcare (CHC) | Severe or complex health needs assessed by NHS | Full care costs, including residential or nursing care | Comprehensive coverage for health-related needs |
| Attendance Allowance | Age 65+, need help with personal care (not means-tested) | Contribution toward care at home or in a care facility | Flexible benefit, usable alongside other funding |
| Private/Long-Term Care Insurance | Purchased in advance, cost depends on age and health | Portion of future care costs (depending on policy) | Financial security and reduced reliance on savings |
| Charitable Grants | Varies by charity and individual circumstances | Part or full contribution to care or additional services | Extra financial help for those in hardship |
Benefits of long-Term care insurance:
- Future security: Provides peace of mind and financial security for future care needs.
- Reduced financial strain: Covers care costs, reducing the impact on personal savings and family finances.
Average Care Home Costs and Coverage
| Cost Component | Average Cost | Potential Assistance Coverage |
|---|---|---|
| Residential Care | £600–£1,500 per week | Local authority funding or attendance allowance |
| Nursing Care | £800–£2,000 per week | NHS Continuing Healthcare |
| Accommodation | £200–£300 per week | Usually self-funded or through family support |
| Additional Services | £50–£200 per week | May be covered by charitable grants |
Choosing the right financial assistance for your family
The best funding option depends on your loved one’s financial situation, health needs, and eligibility. It’s often beneficial to combine multiple funding sources to cover care home costs more effectively. Consulting with financial advisors or care funding specialists can provide additional insight and help families navigate the application process.
Q&A:
1. Is there financial help available for care home costs in the UK?
Yes, several options exist, including local authority funding, NHS Continuing Healthcare, Attendance Allowance, and charitable grants.
2. What is local authority funding, and who qualifies?
Local authority funding is financial support provided by councils for eligible individuals with limited savings and income. To qualify, your savings must typically be below £23,250 (in England) and you must pass a care needs assessment.
3. What is NHS Continuing Healthcare, and how can I qualify?
NHS Continuing Healthcare provides fully funded care for individuals with severe or complex medical needs. Eligibility is determined through a detailed health assessment conducted by the NHS.
4. What is Attendance Allowance, and how can it help?
Attendance Allowance is a tax-free benefit for people over 65 who require help with personal care due to illness or disability. It can be used to contribute toward care home costs or in-home care.
5. Do I have to sell my home to pay for care home fees?
Not always. If a qualifying dependent, such as a spouse, still resides in the property, it may be excluded from the financial assessment for care costs.
6. Are care home fees capped in the UK?
A care cost cap of £86,000 is planned for England, but it excludes accommodation and daily living expenses. The implementation timeline may vary, so it’s best to check current government updates.
7. Can charitable organizations help with care home costs?
Yes, many charities provide financial support for individuals in need. Eligibility depends on the charity’s criteria and the applicant’s circumstances.
8. What does the financial assessment for care costs involve?
The assessment considers your income, savings, and property value. It determines whether you qualify for full or partial funding from the local authority.
9. Are care home costs different across the UK?
Yes, costs vary by region. For example, care home fees in Scotland or London are typically higher than in Wales or Northern Ireland due to differences in funding systems and living costs.
10. How can families plan for care home costs?
Families can explore government assistance, long-term care insurance, and advice from financial planners specializing in care funding. Early preparation helps avoid unexpected expenses.
Need help finding a care home?
Senior Home Plus offers free personalized guidance to help you find a care facility that suits your health needs, budget, and preferred location in the UK.
Call us at 0203 608 0055 to get expert assistance today.
