We explain the options for paying for care at home, from local authority support to paying for it yourself, known as self-funding.
How is care at home paid for?
Home care helps older people who are finding it difficult to cope with daily tasks, such as washing, dressing or getting out and about. Also known as domiciliary care, it can enable someone who needs extra support to maintain a degree of independence and stay in their own home for as long as possible.
Care at home is paid for in the following ways in the UK:
- Local authority funding: the local council funds some or all of the care, subject to a means test.
- Self-funding: the person being cared for (or their family) pays all or most of the costs for their care
- NHS funding: the NHS will cover some or all of the costs in certain circumstances.
Not sure if home care is the right option for you? Read about the pros and cons of care at home.
When will the local authority pay for care at home?
To decide if you are eligible for support, the local authority will first carry out a needs assessment.
If you’re assessed as having ‘eligible needs’, the council will then carry out a financial assessment to work out how much you should contribute to the cost of your care. There are thresholds for savings and assets, above which you will need to pay for your own care.
The upper limits in 2021-22 are:
- England: £23,250
- Wales: £24,000
- Northern Ireland and Scotland: personal care at home is free to those who have been assessed by their local authority as needing it. There is no means test for personal care. Other kinds of support may be charged for.
If you qualify for local authority funding for care at home, you may be offered a personal budget. This is a budget allocated by the council towards meeting your care needs; it enables you to make choices about your own care arrangements.
Read more about council funding for home care and how the financial assessment works across the UK in our guide to local authority funding for home care.
Self-funding care at home
In England and Wales, you’ll have to pay for your own care at home if any of the following applies to you:
- Your savings and assets are above the means-test threshold for care funding (this doesn’t include the value of your home)
- Your income is high enough to cover your care costs, without taking you below a set minimum income level
- Following a needs assessment, your needs weren’t found to be eligible for local authority support.
Even if you don’t qualify for financial support, it’s still important to get a needs assessment
This is worthwhile for a number of reasons:
- The assessment will provide a formal recognition of your needs.
- The council will give you information about the range of services available to meet your needs.
- Even if you are not eligible for funding, you can still ask the local authority to help arrange care services for you (although you will still have to pay for the care).
- The assessment will be important if your needs change in the future.
Care at home is most commonly provided by a domiciliary care agency, who will employ the carers and manage the whole process. Alternatively, you can directly employ a private care professional. Fees are generally calculated on an hourly basis, except for 24-hour live-in care, which is usually charged by the week.
For information about how much care at home costs, read our article on home care fees.
Ways to pay for home care if you’re a self-funder
There are several ways that you might raise the funds to pay for your care:
- Savings and investments.
- Income from pensions, work or property.
- Make sure you are getting all of the benefits you may be entitled to, such as Attendance Allowance, which isn’t means-tested.
- Equity release – if you own your home, you might be able to use an equity release scheme to ‘unlock’ cash from the value of your property.
- If you release equity from your home or if you already have substantial savings, you could purchase an immediate needs annuity. Although this involves paying out a large sum of money upfront, it can offer the peace of mind of knowing your care fees will be met for as long as necessary.
- Downsizing – selling your current home and buying a smaller one could give you a lump sum to help pay for care.
- Financial help from family or friends.
- Letting a room – if you have enough space, you might consider letting a room to a lodger. This can help raise extra money without the need to move house.
Remember, you may not be permanently self-funding. Once your assets drop below a certain level, you may then qualify for state funding.
For more ideas on how to cover care costs, see our article on Self-funding a care home. Although moving to a care home involves different financial challenges, many of the strategies we cover there can also be applied to funding care in your own home.
Whichever option you choose, consider seeking advice from an accredited later life financial adviser who is a fully listed member of the Society of Later Life Advisers (SOLLA).
Which? members can also call our Which? Money Helpline for guidance on paying for long-term care, as well as a wide range of other money issues.
Will the NHS cover the cost of care at home?
The NHS will pay all care costs at home under certain circumstances. NHS Continuing Healthcare funds people who need ongoing health care outside of hospital if they have complex medical care needs due to disability, accident or a major illness. This funding is only available for people with complex medical needs and it isn’t means-tested.
After a short illness or a stay in hospital, you may be eligible for up to six weeks of NHS-funded care at home. This is called NHS Intermediate Care.
Paying for care in later life: download our free guide
Our guide provides straightforward information to help you navigate the challenges of paying for care in later life.
The guide explains how care is funded across the UK, how much different care services typically cost, and how to find out if you’re eligible for financial support. It also gives useful tips on how to juggle your finances if you have to cover some or all of the costs yourself.
The guide is free to download.
What happens if I run out of money?
If you are a self-funder, once your savings and assets fall below the threshold for state funding, the local authority then has a duty to contribute to the cost of your care. The thresholds for care funding vary across the four UK nations.
Contact your local authority if your assets fall below this level. It will then carry out a reassessment of your needs together with a financial assessment to decide how much support you’re eligible to receive.