Care Home Costs: What Benefits Can You Claim if You Are Self Funding?
What’s Happening with Care Home Costs in the UK Right Now?
Care home fees have continued to rise across the UK, driven by inflation, staffing costs, and enhanced regulatory standards intended to improve resident safety and quality of life. As of early 2025, the average weekly cost for residential care stands at approximately £1,150, while nursing care, which includes on‑site registered nurse support, averages £1,350 per week. These figures can vary significantly between rural and urban areas, and the South East typically commands some of the highest fees.
Key Drivers of Rising Costs:
- Increased Wage Bills: The National Living Wage and mandatory staff training add to operator overheads.
- Enhanced Regulations: New Health and Social Care standards require investment in facilities, technology, and ongoing staff development.
- Growing Demand: With over 18% of the population aged 65 and above, demand for care services has outstripped capacity in many regions, pushing prices higher.
With costs climbing, understanding which benefits you can still claim is crucial for self‑funders keen to manage their budgets effectively.
What Does “Self‑Funding” Actually Entail?
Who Is Classed as a Self‑Funder?
You are considered a self‑funder if:
- In England, savings over £23,250, £27,000 in Northern Ireland, or £50,000 in Scotland may disqualify you from support; in Wales, means-testing starts above £50,000.
- You choose not to ask your local authority to arrange or subsidise your care home place.
- You enter a care home under a private contract, paying the full fee yourself or via personal arrangements.
Being a self‑funder means taking on the full financial responsibility, but it does not necessarily preclude you from accessing certain support mechanisms.
How Does a Financial Assessment Work?
If you decide to approach your local authority for any contribution, they will carry out a means test:
- Assessable Capital: Includes bank and building society accounts, stocks and shares, and—after 12 weeks—the value of your home, minus any mortgage.
- Assessable Income: Covers state pension, occupational and personal pensions, benefits, and any other regular income.
- Savings Tariff: For each £250 (or any portion) of capital exceeding £14,250, the council increases your assessable income by £1 per week.
- Weekly Contribution: If your assessable income is lower than the agreed care home fee, the council pays the difference—unless you choose to fund privately.
A means test ensures any council help is targeted where it is most needed, but for true self‑funders, this step is often skipped in favour of private arrangements.
What Benefits Can You Claim if You Are in a Care Home and Self Funding?
Can You Still Claim Attendance Allowance?
Yes—provided your care home fees aren’t entirely covered by the NHS or local council. Attendance Allowance supports those over State Pension age who need personal care, without considering income.
| Attendance Allowance Rates (2025) | Weekly Payment |
|---|---|
| Lower Rate | £72.65 |
| Higher Rate | £108.55 |
- What It Covers: Personal care support such as assistance with bathing, dressing, and eating.
- How to Claim: Complete form AA1A on GOV.UK: backdate claims up to three months.
- Important Caveat: If your care home stays become fully funded by NHS Continuing Healthcare or council funding, Attendance Allowance entitlement ceases.
Is Personal Independence Payment (PIP) Affected?
- Daily Living Component (up to £92.40/week): Remains payable if under 65 and the care needs assessment qualifies you.
- Mobility Component (up to £67.60/week): Unaffected by care home residence and continues regardless of where you live.
- Transition Note: New PIP claims close at age 65; those already on PIP continue, while eligible new applicants over 65 must apply for Attendance Allowance instead.
What About NHS‑Funded Nursing Care?
Flat Rate Contribution of £235.88 per week (England rate) covers registered nursing care within a private care home.
- Eligibility: Assessed by a community or district nurse who confirms you need nursing care.
- Payment Flow: Paid directly to the care home to offset the nursing element of the fee.
- No Financial Assessment: This contribution does not depend on your savings or income—NHS-funded nursing care is a universal entitlement for those who qualify on clinical grounds.
Can Pension Credit Help?
Pension Credit is a means-tested benefit that consists of two parts:
- Guaranteed Credit: Tops up weekly income to £201.05 for single people and £307.45 for couples (2025 rates).
- Savings Credit: (Closed to new claimants from April 2016, but existing recipients retain entitlements) adds extra for those who saved during their working life.
- Severe Disability Premium: Up to £75.55 per week if you already receive Attendance Allowance or PIP and live alone, or are treated as living alone for benefit purposes.
Pension Credit can indirectly support your care costs by supplementing income that offsets your weekly care home fees.
Are There Additional Support Schemes for Self‑Funders?
Can You Get Council Tax Relief for Your Former Home?
When you move into permanent care, your previous property often becomes unoccupied:
- Exemption Period: Most councils grant a full Council Tax exemption for an initial period (commonly 6 months).
- Longer Term Relief: Some authorities then offer a discount (up to 50%) if the property remains empty due to your care home stay.
How Do Deferred Payment Agreements Work?
A Deferred Payment Agreement lets you delay selling your home to fund care costs.
- Council‑Administered Loan: The council funds your care and secures it with a legal charge on your home.
- Interest & Fees: A small interest charge and handling fee might be applicable.
- Repayment: Triggered when your home is sold—often through your estate after you pass away, helping preserve cash flow during your lifetime.
DPAs are particularly valuable for those who wish to keep their home in the family or avoid forced sales.
What Are Top‑Up Fees and Contract Types?
- Local Authority Contract: The council negotiates a set rate with certain homes, often lower than private fees.
- Self‑Funder Top‑Up: If you select a more expensive home, you pay the difference between the council rate and the full fee.
- Mixed Funding Arrangements: The council contributes up to its contracted rate, and you cover any additional cost directly to the home.
Understanding contract types ensures you choose the best financial arrangement for your circumstances.
How to Apply? Step‑by‑Step Guide
- Gather Required Documents
- Latest bank and building society statements
- Pension and benefit award letters
- Valuation report for your home (for DPA discussions)
- Initiate a Care Needs Assessment
- Get in touch with your local council’s adult social care team for assistance.
- Arrange for a social worker to assess your physical, mental, and daily living requirements
- Request a Financial Assessment (if desired)
- Complete the council’s means‑test form
- Provide evidence for income and capital
- Claim Non‑Means‑Tested Benefits
- Download and complete form AA1A for Attendance Allowance.
- For under‑65s, apply to DWP for PIP or DLA as relevant
- Set Up a Deferred Payment Agreement
- Discuss terms with the council’s finance team
- Sign the agreement outlining fees, interest, and property charges
- Review Your Situation Annually
- Benefit rates and thresholds typically update each April
- PIP and Pension Credit awards may require periodic reassessments
Quick Snapshot: Self‑Funder Benefit Entitlements
| Benefit | Eligibility Criteria | Weekly Rate / Benefit |
|---|---|---|
| Attendance Allowance | Over State Pension age, self‑funded care | £72.65–£108.55 |
| NHS‑Funded Nursing Care | Clinical need for nursing care | £235.88 |
| Personal Independence Payment | Under 65, daily living component only | Up to £92.40 + mobility up to £67.60 |
| Disability Living Allowance | Legacy claimants under 65 | Varies by care level |
| Pension Credit (Guaranteed) | Income below the threshold | Up to £201.05 (single), £307.45 (couple) |
| Council Tax Exemption/Discount | The property is unoccupied due to permanent care | Full exemption/up to 50% discount |
| Deferred Payment Agreement | Own home, council’s approval | Fees deferred, repaid on property sale |
Bottom Line: Why Claiming Benefits Matters for Self‑Funders
With care home fees rising faster than many household incomes, tapping into every available benefit can substantially reduce your personal outlay. From Attendance Allowance to the NHS nursing contribution, these measures are designed to ease the burden, even for those funding their own care.
Action Points:
- Assess your assets and projected care costs.
- Apply swiftly for Attendance Allowance and PIP/DLA to avoid back‑dating issues.
- Explore Deferred Payment Agreements to protect your home’s value.
- Consult a benefits adviser or solicitor for tailored strategies.
Maximising support preserves your capital and delivers peace of mind—ensuring your later years are both comfortable and financially sustainable.
Frequently Asked Questions (FAQs)
Can I Get Benefits if I Move Across UK Nations?
Yes, but thresholds differ:
- England: £23,250
- Scotland: £50,000
- Northern Ireland: £27,000
- Wales: There is no maximum cap; financial assessments begin only when assets surpass £50,000.
What Happens When My Savings Fall Below the Threshold?
Once capital dips below £14,250 (England), the savings tariff stops and your means‑tested contribution may be reassessed, potentially increasing council support.
How Does the 12‑Week Property Disregard Work?
Your home’s value is ignored for the first 12 weeks of permanent residential care, giving you breathing space to decide on funding arrangements without immediate sale.
Should I Seek Legal Advice for Deferred Payments?
While not mandatory, legal guidance can clarify:
- Interest calculation and overall costs
- Impact on inheritance and beneficiaries
- Alternative estate planning strategies
