Care home funding in England 2025

Each country in the UK has different rules when it comes to funding your care home. If you live in England it is important to have a good understanding of how much care homes in England cost, how care home funding in England works and any additional funding or benefits you may be eligible for.

Whether you are eligible for funding from your local authority depends on how much money you have. Each country in the UK has its own thresholds for who is eligible for funding. 

How much do care homes in England cost?

Care home costs in England vary greatly between the home, its location and the level of care you need.

Currently, the average residential care home cost for people paying for their own care is £1,266 a week. The average nursing home cost is £1,528.

Costs may differ if you’re receiving funding from your local authority.

Care homes you are interested in will be able to give a more exact idea of how much your care with them will cost.

What are the thresholds for care home funding in England?

Self-funding is when you pay for care home fees yourself. 

State-funding is when your local authority pays your care home fees for you.

To decide which you are, the local authority will conduct a financial means test. This is an assessment of the amount you have in capital and assets.

In England, the thresholds for 2024/25 are:

Lower limit: £14,250 – If you have below this amount, your care will be state-funded.
Upper limit: £23,250 – If you have above this amount your care will be self-funded.

If you have between £14,250 and £23,250 in capital and assets, your care will be partially state-funded and partially self-funded.

A relative or friend can also pay your fees for you or pay a top-up fee. A top-up fee makes up the difference between what you can afford and the fees of the care home.

Only the person or body who has signed the care home contract agreeing to pay your fees is legally obliged to.

Is there a cap on care home fees in England?

The Conservative government had promised that from October 2025 (this was originally due to come into effect in 2023 but has been delayed), no one in England would have to pay more than £86,000 in care costs during their lifetime.

The idea behind the proposed cap on care home fees in England is that it would put an end to home owners having to sell their houses to pay for their care.

The Labour government scrapped the proposed reform on 29 July 2024 saying it needed to tackle a spending ‘black hole’ which it had inherited from the previous government.

What funding is available in England to help with care home fees?

If you have certain needs, you may be eligible for additional funding from the NHS.

NHS continuing healthcare funding (NHS CHC)

If you are eligible for NHS CHC, you’ll have your personal care and/or specialist support paid for by the NHS.

To be eligible, you must be assessed as having a ‘primary health need’. This is an ongoing physical or mental health condition, and the care you receive must be focused on treating or preventing this condition.

NHS funded nursing care (FNC)

If you don’t qualify for NHS CHC, but need nursing care, you may be eligible for FNC. This is a contribution from the NHS to pay towards the nursing part of your fees.

FNC in England is currently £235.88 a week. People who began claiming earlier may receive a higher rate of £324.50. To be eligible for the higher rate, you’ll need to have qualified for FNC before October 2007 and continue to do so. 

In England, the funding comes through your nursing home’s local Clinical Commissioning Group (CCG).

Can I still claim benefits while living in a care home in England?

Moving into a care home is a significant change in circumstances, so the benefits and amounts you are eligible for may change.

A significant decider in this is whether you are state-funded or self-funded.

How will moving into a care home in England affect my pension?

You can continue to receive State Pension and any private pension(s) when you move into a care home.

State Pension

If you are a self-funder, you can continue receiving their State Pension as usual when you move into a care home.

Basic State Pension	New State Pension
This is for: •    Men born before 6 April 1951 •    Women born before 6 April 1953	This is for: •    Men born on or after 6 April 1951 •    Women born on or after 6 April 1953
£169.50 a week	£221.20 a week

Personal Expenses Allowance (PEA)

If you are state-funded, your State Pension will be used towards your care home fees, but a bit is set aside to ensure you have some money to spend. This is called a Personal Expenses Allowance (PEA).

In England, PEA is currently £30.15 a week.

Private pensions

Private pensions are included as an income in your financial means test. 

If you have a private pension and a partner who will remain living in your home, you can choose to have half of your pension given to them. If you do this, that half of the pension won’t be included in your financial means assessment.

Pension Credit

Pension Credit is for people of state pension age who have a weekly income below a certain amount.

If you move into a care home, your eligibility for Pension Credit is calculated the same as if you were living at home.