Care Home Costs UK 2026–27: Fees, Means Test & NHS Funding

Care homes in England cost £1,042–£1,594 per week on average, depending on care type — with self-funders paying considerably more than council-funded residents (Laing Buisson Care Homes for Older People UK Market Report, 35th Edition, 2025). If your assets exceed £23,250, you pay in full (Care Act 2014). But if your relative's care needs are primarily health-driven, the NHS may fund 100% through Continuing Healthcare — no means test, no savings threshold.

TL;DR: Self-funders pay an average £1,278/week for residential care and £1,594/week for nursing care in England (Laing Buisson, 2025). The means test threshold has been frozen at £23,250 since 2010 — the planned rise to £100,000 was cancelled in July 2024. NHS Continuing Healthcare removes fees entirely for those with a primary health need. Most families who qualify are never told it exists.

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What's New for Care Home Funding in May 2026?

Three reform stories changed the care funding picture in spring 2026: 12 NHS Integrated Care Boards (ICBs) were abolished and replaced by 6 successor ICBs on 1 April 2026, NHS England itself is being abolished by April 2027, and the Casey Commission continues to examine long-term means-test reform — though no recommendations are expected before 2028 (NHS England, 2026 / Institute for Government, 2026).

For families paying — or about to pay — care home fees, three practical implications follow:

• The £23,250 means-test threshold has not changed. Despite the Casey review, no near-term legislation is in train. Plan as though the threshold will remain frozen until at least 2028. Read more on the ICB merger impact on CHC claims.
• NHS-funded Nursing Care (FNC) rose to £267.68/week from 1 April 2026 — a 5.4% rise from £254.06 (gov.uk, 2026). Families with a nursing-home placement should check the FNC contribution is being applied to the bill correctly.
• NHS CHC eligibility statistics now show 17% standard eligibility — meaning a person assessed at 1990s rates would have been four-fold more likely to qualify than today (NHS England, Q4 2024/25). The bar for CHC has tightened significantly. Strong evidence preparation matters more, not less.

The means-test rules and care-home cost figures below remain accurate for 2026–27. The reform stories above change the political context around care funding, not the day-to-day rules a family must navigate when a relative enters care this month.

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How much do care homes cost in 2026–27?

Self-funders in England pay £1,278 per week for residential care and £1,594 per week for nursing care on average — figures that have risen 27–28% since 2021–22 as National Living Wage increases pushed up staffing costs across the sector (Laing Buisson Care Homes for Older People UK Market Report, 35th Edition, 2025, via Which?). Council-funded residents pay less: £908/week for residential and £1,225/week for nursing care on average.

The breakdown by care type:

• Residential care (self-funder): £1,278 per week
• Nursing care (self-funder): £1,594 per week
• Specialist dementia care: £1,365–£1,599 per week depending on nursing provision (Lottie, 2026)

In London and the south-east, costs run 20–30% higher than those national averages. A nursing home placement in Surrey or central London can exceed £1,900 per week for self-funders. See our care home costs by region breakdown for full regional data.

Translate those weekly figures to annual costs and the scale becomes clear. Residential care for a self-funder: approximately £66,500 per year. Nursing care: £83,000 or more. Specialist dementia nursing: over £83,000. These are averages — premium homes charge more, and most families self-fund for longer than they expected when they first arranged the placement.

What does that mean in practice? The cost of care home fees isn't a one-off expense. It's a weekly bill that continues for as long as your relative lives in the home. We've worked with many families surprised to find that a two-year placement can consume more than their entire savings. The average residential placement runs to approximately two to three years (Laing Buisson, 2025). At £1,278 per week, a two-year residential stay totals over £133,000. If your relative's care needs are primarily health-driven, NHS Continuing Healthcare can remove these costs entirely — the NHS pays 100% with no means test.

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Who pays for care home fees in England?

The answer turns on a single figure: £23,250. In England, the means test upper capital threshold is £23,250 — unchanged since 2010 and frozen there for the 16th consecutive year in 2026–27 (DHSC Local Authority Circular 2026–27). The planned rise to £100,000, set for October 2025 under the Health and Care Act 2022, was cancelled by Chancellor Rachel Reeves in July 2024.

Had the thresholds risen with inflation since 2010, the upper limit would now be approximately £35,250. Instead, they've remained frozen — meaning a growing proportion of middle-income households face full self-funding that Parliament originally intended to reduce. The Casey Commission is examining long-term reform, but recommendations aren't expected until 2028. No near-term threshold changes are planned.

Above £23,250 in assets (England, 2026–27): your relative pays care home fees in full. This is the self-funder threshold. The local authority makes no contribution above this figure.

Below £23,250: the local authority contributes to fees. But your relative still pays an assessed income contribution toward care costs. The council doesn't cover everything. From April 2026, the personal expenses allowance — the weekly amount your relative keeps from their income — is £31.80 (DHSC Local Authority Circular 2026–27).

Property and the means test: property is counted as an asset unless a spouse, civil partner, or certain qualifying persons still live there. If your relative's home is their main asset and no exemption applies, it falls inside the means test.

Common misconception — "the NHS pays for the first 12 weeks." This is wrong. The correct position: the local authority may disregard property for the first 12 weeks of a permanent care home placement. It's not NHS funding. It's a temporary disregard that allows time to sell the property or arrange a deferred payment agreement.

Deferred payment agreements (Care Act 2014, s.34) let fees accumulate as a debt against the property, repaid on death or sale. This delays payment — it doesn't reduce the total. Age UK provides further guidance on paying for care.

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The care home means test explained

The means test looks at both capital and income. In 2026–27, the upper capital limit remains £23,250 and the lower limit remains £14,250 — both frozen since 2010 and unchanged from last year (DHSC Local Authority Circular 2026–27). The planned reforms that would have raised both limits were cancelled in July 2024. The £86,000 lifetime care cost cap was also cancelled.

Capital thresholds (England, 2026–27):

• Lower limit: £14,250
• Upper limit: £23,250
• Above the upper limit: full self-funding, no local authority contribution
• Below the lower limit: local authority contributes to fees

What counts as capital:

• Savings and bank accounts
• Investments and shares
• Most property (with exceptions below)

When property is disregarded:

• A spouse or civil partner still lives there
• A disabled relative lives there
• During the first 12 weeks of permanent placement (local authority disregard — not NHS)

Income assessment:

Your relative's income — pension, benefits, interest — is assessed and counted toward their care contribution. The personal expenses allowance of £31.80 per week (DHSC, from April 2026) is excluded. Everything above that goes toward fees.

Tariff income:

Between the lower and upper capital thresholds, the council applies a tariff income calculation: £1 per week for every £250 of capital. Capital is treated as generating notional income, even if it earns nothing in practice. A person with £20,000 in savings has £23.00 per week added to their assessed contribution on top of their actual income.

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Four ways families reduce care home fees

Self-funders pay around 40% more than the rate local authorities pay care homes (Laing Buisson, 2025) — which means the first question worth asking isn't how to reduce fees, but whether fees should apply at all. Families facing care home fees typically explore four routes. Only one removes fees entirely.

1. NHS Continuing Healthcare (CHC)

NHS Continuing Healthcare pays 100% of care costs. No means test. No savings threshold. No property assessment. CHC applies when a person's primary need is health, not social care. It's the only route that eliminates fees entirely.

2. Tenants in common

A tenants in common arrangement can protect a non-resident spouse's defined share of a property from the means test. It doesn't protect the resident's own share — their 50% is still assessed. This is a partial protection for one spouse, not a fee elimination strategy.

3. Local authority funding

When assets fall below £23,250, the local authority contributes. Your relative still pays an assessed income contribution. This reduces what they pay — it doesn't remove fees.

4. Deferred payment agreement

A deferred payment agreement (Care Act 2014, s.34) lets fees accumulate against property, repaid on death or sale. The total cost stays the same. Payment is delayed, not reduced.

CHC is the only route that eliminates care home fees entirely. The other three reduce, delay, or restructure them — the fees themselves remain.

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Can the NHS pay for care home fees?

Yes — through NHS Continuing Healthcare (CHC). 51,154 adults in England were eligible for standard CHC at the end of Q4 2024/25 — a 17% standard eligibility rate, down from 31% just eight years ago (NHS England, Q4 2024/25, via Healthwatch UK, 2025). Research by Independent Age (Turned Away: How the NHS is Failing People Who Need Continuing Healthcare, 2023) found that significantly more people who meet the eligibility criteria are never assessed at all. The NHS doesn't volunteer the assessment. You have to ask. For a full walkthrough of the assessment meeting, see our CHC MDT assessment guide.

CHC isn't social care. It's NHS healthcare funding for adults whose care needs arise primarily from health conditions rather than social care needs. The legal framework is the National Framework for NHS Continuing Healthcare and NHS-funded Nursing Care (2022).

If your relative qualifies, the NHS pays 100% of care costs — care home fees, nursing care, and personal care. No means test. No savings threshold. A person with £500,000 in assets receives identical funding to someone with nothing, if their health needs meet the criteria.

The eligibility test is whether your relative has a "primary health need." That means their day-to-day care needs, taken as a whole, arise primarily from health conditions. The assessment uses a 12-domain Decision Support Tool covering behaviour, cognition, communication, mobility, continence, skin integrity, breathing, medication, and other clinical areas.

Conditions that commonly lead to successful CHC claims include advanced dementia with behavioural disturbance, complex nursing needs requiring daily clinical intervention, serious continence problems affecting skin integrity, and multiple co-existing conditions where the combined care burden is primarily health-driven. In our casework, the biggest mistake families make is assuming their relative's needs are "just social care" when the clinical picture clearly points to a primary health need.

Worth noting: dementia care home fees represent some of the highest costs in the system — yet dementia is also one of the conditions most likely to qualify for CHC funding.

The most common failure is procedural, not clinical. Families never ask for a CHC assessment. The NHS doesn't volunteer it. The boundary between NHS-funded CHC and council social care is contested territory, and neither system proactively identifies when NHS funding applies instead.

You can request a CHC checklist yourself. You don't need a referral. You don't need permission from the care home or the local authority.

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What happens when care home fees run out?

Local authorities pay care homes around 25–40% less than self-funders pay — a £370/week gap on residential care and £369/week on nursing care, on average (Laing Buisson 35th Edition, 2025). When your relative's assets fall to £23,250, the local authority becomes responsible for contributing — but at the lower council rate, not the rate the home charges your family. This is when many families encounter a problem they hadn't anticipated.

The council funds at its local authority rate — often significantly less than what the care home charges private payers. The care home then faces a choice: accept the lower rate, or ask someone to make up the difference.

This is where family members may be approached for a third-party top-up. A top-up is a voluntary payment to bridge the gap between the council's rate and the care home's fees. It isn't compulsory. The council must offer at least one suitable placement at its own rate, without requiring a top-up.

If no one pays a top-up, the care home may accept the council rate — or the council may arrange a move to a different home that accepts its rate. This is a difficult prospect, but it's the practical reality when fees run out and no plan is in place.

If CHC applies, none of this arises. The NHS pays regardless of your relative's assets. There's no threshold to fall below, no means test to trigger, no top-up to negotiate. If your relative's care needs are primarily health-driven, the funding obligation sits with the NHS from day one — whether they have £500,000 or £500.

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Care home fees comparison table

The table below separates self-funder rates from council-funded rates — two very different figures that are often conflated. Self-funders are those above the £23,250 threshold; council rates are what local authorities pay on behalf of those below it.

The NHS-funded Nursing Care (FNC) contribution of £267.68 per week (from 1 April 2026, NHS England) is a flat-rate payment toward nursing costs for nursing home residents who have nursing needs but don't qualify for full CHC. It's paid automatically to eligible residents. It reduces the bill — it doesn't eliminate it. FNC and CHC are not the same thing.

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Want a professional assessment? Our Case Strength Report (£97) reviews your relative's care needs against all 12 CHC domains and identifies where you have strong evidence — and where you need more.

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Last reviewed: 5 May 2026. CareAdvocate content is reviewed by legal professionals and social care professionals. We provide CHC advocacy and evidence preparation, not legal advice.