How Much Will the Local Authority Pay for a Care Home?

How much a local authority will pay for a care home depends on your finances and on the rate the council has negotiated with the home. For 2026 to 2027, if your capital sits below £14,250 the council covers everything except a contribution from your income; if it sits above £23,250 the council pays nothing and you fund the placement yourself; between those figures you share the cost on a set formula.¹ Whatever your contribution turns out to be, the council only pays up to its own agreed rate for the home, and those rates vary widely from one authority to the next.

The Three Capital Bands

The financial assessment starts with your capital: savings, investments, and in most cases the value of property you own. Where that total falls decides which of three positions you’re in.

Above £23,250: you pay the full cost. The council has no funding duty, though it can still arrange the placement for you if you ask.
Between £14,250 and £23,250: you pay from your income plus a means-tested slice of your capital. The council picks up the rest.
Below £14,250: your capital is ignored. You contribute only from income, and the council pays the balance.¹

The middle band uses what’s called tariff income. For every £250 (or part of £250) of capital above the £14,250 lower limit, the council treats you as having an extra £1 per week of income. If you hold £18,250 in savings, that’s £4,000 above the limit, which divides into 16. The council adds £16 a week to your assessed income and bills you accordingly.¹

How Your Weekly Contribution Is Worked Out

On top of any tariff income, the council counts your actual income: state and private pensions, most benefits, annuities. Some income is disregarded depending on your circumstances. You then keep a Personal Expenses Allowance of £31.80 a week for 2026 to 2027, up from £30.65 the year before.¹ That allowance is yours for things the home doesn’t provide, such as toiletries, clothes, or a newspaper.

Add the tariff income to your assessed income, subtract the PEA and any disregards, and the result is what you pay the home each week. The council pays whatever remains, up to its agreed rate.

What the Council Actually Pays the Home

There is no national figure. Each authority negotiates its own “usual cost” or standard rate with local providers, and those rates reflect the area, the level of care, and local market conditions. Private care home fees in England commonly run from around £1,100 a week in northern regions to over £1,500 in London and the South East for residential care, with nursing care several hundred pounds higher. Local authority rates often sit below private fees, and that gap matters when you’re choosing a home.

Top-Up Fees When the Home Costs More

If the home you want charges more than the council will pay, someone has to make up the difference. This is a top-up, authorised under section 30 of the Care Act 2014.² The top-up is paid on top of your assessed contribution and the council’s share.

The top-up almost always comes from a third party: a relative, friend, or charity. You generally can’t pay it yourself. The two exceptions are during the 12-week property disregard and where you have a deferred payment agreement in place. Whoever agrees to pay a top-up is signing up to an ongoing commitment. If the payments stop, the council may have to move you to a home within its standard rate.

What the Payment Doesn’t Cover

The council’s contribution covers accommodation and the care that meets your assessed needs. It doesn’t cover hairdressing, private therapies, or trips beyond what the home includes as standard. Those come from your Personal Expenses Allowance or from family.

How Property Changes the Calculation

For most people, the family home is the biggest asset in the room. The default rule is that its value counts as capital if you own it and no one qualifying lives there, which typically pushes you above the upper limit on its own. Several disregards can change that.

Your home must be left out of the assessment entirely if it’s the main residence of your spouse or civil partner, a relative aged 60 or over, or an incapacitated relative. Councils can also disregard the property in other situations at their discretion, for example where someone gave up their own home to care for you and now lives in yours.³ Where a disregard applies, the property doesn’t push you above £23,250 and the council pays as if it wasn’t there.

The First 12 Weeks

When you first move into a care home permanently, the value of your home is ignored for the first 12 weeks even if no one qualifying lives there.³ During that window the council assesses you as though the property doesn’t exist, which often means it covers most or all of the fees. The same 12-week disregard kicks in if another property disregard suddenly ends, for instance because a qualifying relative dies or goes into care.

Deferred Payment Agreements

After the 12 weeks, the property’s value enters the assessment. If you haven’t sold it, you could be above the upper limit and technically liable for the full fee. A deferred payment agreement under section 34 of the Care Act 2014 lets the council keep paying the home and take a legal charge over your property as security.⁴ The debt is repaid later, when the property is sold or from your estate. Interest and an administration charge apply, so the total you owe grows over time. The council cannot force a sale while the agreement runs, and you keep ownership until the debt is cleared.

NHS Payments That Reduce or Replace the Council’s Share

Council funding isn’t the only public money in play, and two NHS routes are often missed.

NHS-Funded Nursing Care

If you live in a nursing home rather than a residential one, the NHS pays a flat weekly contribution toward the nursing element of your care. From April 2025 the rate is £254.06 a week, paid directly to the home.⁵ It isn’t means-tested. Everyone in a qualifying nursing home gets it, and it reduces the balance that you or the council need to cover.

NHS Continuing Healthcare

NHS Continuing Healthcare is a different arrangement altogether. Where your primary need is a health need rather than a social care need, the NHS funds the whole package, accommodation included, with no contribution from you and no means test. A multidisciplinary team assesses the complexity, intensity, and unpredictability of your needs. One “priority” need, or severe needs in at least two areas, usually indicates eligibility.⁶ Eligibility turns on the nature of your needs, not on any particular diagnosis. The financial difference between council funding and full NHS funding is substantial, so it’s worth pursuing where health needs are complex or changing quickly.

Timing If You’re Self-Funding Now

Many people start out paying the full cost because their capital is above £23,250, then run down toward the threshold over months or years. Contact the council before you hit it, not after. The financial assessment takes time to arrange, and any weeks you spend paying the full rate after crossing the line are weeks you’re overpaying.

If you own property, watch the interaction carefully. Non-property savings can drop below £23,250 while the counted property value keeps your total above it. The 12-week disregard buys breathing space when you first move in permanently, and a deferred payment agreement can carry you through afterwards without a forced sale.³⁴

If You Think the Amount Is Wrong

Disputes usually come down to which income has been counted, whether a disregard should apply, or whether the home you’ve chosen falls within the council’s standard rate. Start by asking social services to explain or informally review the figure; a lot of disagreements dissolve once the arithmetic is laid out. If that doesn’t fix it, use the council’s formal complaints procedure. If you’ve exhausted that route and still disagree, the Local Government and Social Care Ombudsman investigates complaints about councils and expects you to have been through the council’s own process first.⁷ Continuing Healthcare disputes follow a separate NHS route, with the Parliamentary and Health Service Ombudsman as the final stop.

1
GOV.UK. Social Care – Charging for Care and Support 2026 to 2027
2
Legislation.gov.uk. Care Act 2014 – Section 30
3
GOV.UK. Care and Support Statutory Guidance
4
Legislation.gov.uk. Care Act 2014 – Section 34
5
NHS. NHS-Funded Nursing Care
6
NHS. NHS Continuing HealthcareNHS Continuing Healthcare Checklist Guidance
7
Local Government and Social Care Ombudsman. How to Complain