Last Updated: July 24, 2026

An increasing number of people are being cared for in their own home. In this blog, Daniel Kasaska, Regional Co-ordinator at Protection & Investment Limited, discusses key things to consider when arranging funding for home care or a care home.

Many people assume home care to be associated with help with daily tasks and/or nursing care, but nowadays there are extensive services available allowing you to live well in your own home for as long as you want. Home care services range from companionship, gardening and food shopping to 24-hour live-in care.  

For many people, remaining in the comfort of their own home is very important. However, this depends on individual needs which would be assessed prior to service delivery. You can tailor a home care package to suit you, meaning it can often be a more affordable option than residential care where you are required to pay for your accommodation and food, in addition to the care services you receive.

How best to pay for care

State funding for home care or a care home – will the state pay?

Many people don’t realise that there is a difference between health and social care, including that the former is free, and the latter is means tested. For example, health care relates to needs which must be administered by a registered nurse and it’s free, provided and funded by the NHS.

Local authority funding for home care or a care home

In contrast, local authorities provide social care services. For example, an individual who requires support getting dressed in the morning and with transferring from room to room does not require a qualified nurse to administer these tasks. In this case, it would fall under the local authority’s remit and would not be the responsibility of the NHS. 

Your local authority must carry out an assessment of your ‘social care’ needs if you appear to be someone who may have a right to services. This decision must not be influenced by your financial circumstances. A representative from your local authority, such as a social worker, usually visits you to discuss your needs and to decide with you what actions should be taken. 

Only once an individual has been assessed as having an eligible care need should a financial assessment be completed to determine who pays for what. The financial assessment differs depending on whether someone is receiving care in a care home, at their own home or elsewhere.

Self-funding for home care or a care home

Following both a ‘need’ assessment and ‘financial’ assessment completed by your local authority, having established that an individual is a ‘self-funder’ (partially or fully funding their own social care, or where someone is paying third party top ups), the next step is to assess the most appropriate way for care fees to be funded, considering current fee levels and likely future increases.

The nine available ways to pay for care

There are essentially nine ways available to pay for care. Each has innate advantages and disadvantages and the suitability of each should be measured against your specific circumstances, needs, risk profile, capacity for loss, vulnerability and aspirations. The best funding solution for you may involve one or a combination of two or more of the following:

  1. A Deferred Payment Scheme.
  2. Rental income from residential property.
  3. Equity released from residential property.
  4. Funds released through the sale of residential property/downsizing.
  5. Liquid assets/cash/income.
  6. Investments/portfolios.
  7. Pension income.
  8. Long Term Care Insurance Product (LTCI).
  9. Third party top-ups.

Things to consider

There are several considerations when deciding the most appropriate way to pay for your care fees. These include (not an exhaustive list):

  • Your wishes and family considerations.
  • The costs of your care and the potential of future increases in these costs (changing needs/inflation).
  • The level of care needed both now and in the future.
  • Expenditure that needs to be maintained regardless of care needs.
  • Your attitude to risk.
  • Government legislation and local authority guidelines.

Cost of care at home?

One of the first things you need to consider when choosing a home care provider is the price. This varies depending on where you live, but you should expect to pay at least £20 for the hourly cost of care at home.

This can be cheaper than going into residential care – however, each provider will charge differently and fees also depend on your geographical area. It is worth mentioning that fees can increase at weekends and bank holidays. For example, if you need home care for two hours per day at a rate of £25 per hour, this means you will pay:

  • £350 per week.
  • £1,400 per month.
  • £16,800 per year.

How much does live in care cost?

Live in care can cost between £800 and £1,600 per week, depending on your needs.

How do I access care at home?

Care Choices publishes care services directories across England in association with local authorities. Each publication, also available electronically, covers topics which you may find useful if you are considering your care options, including how to access care at home. Visit its dedicated website to find your local publication.

Will the local authority help with the cost of care at home?

You may be eligible for your local authority to contribute towards the cost of your care if you have less than £23,250 in savings.

Exactly how much your council will contribute depends on what care you need and how much you can afford to pay. Subject to an initial assessment identifying that you have eligible care needs, your local council will complete a financial assessment (means test) to work out what you will have to pay towards the cost of your care. If you have more than £23,250 in savings, you will be expected to fund your own care (self-funder).

Attendance Allowance

You can claim Attendance Allowance if you have reached State Pension age, need care or supervision because you have an illness or disability and have needed care or supervision for at least six months because of your illness or disability. It is paid at two different rates and depends on the level of care that you need:

  • Lower rate: £61.85 per week.
  • Higher rate: £92.40 per week.

Visit GOV.UK for more information about Attendance Allowance.

What happens when my money runs out?

If you are a self-funder paying for your own care and your capital falls below £23,250, your local authority may assist with funding for home care or a care home. You should request an assessment a few months before this happens.

Financial advice

We strongly advise that anyone requiring care should seek financial advice from a trusted and qualified financial adviser. Research shows that most people receive insufficient advice on how care fees can be funded which can result in many thousands of pounds being wasted.

About Daniel Kasaka

Daniel Kasaska is a Regional Co-ordinator specialising in paying for care at Protection & Investment Ltd, Independent Financial Advisers, is a member of the Society of Later Life Advisers and holds all the necessary qualifications to advise in this area. Call 01344 636374, 07766 951175, email [email protected] or visit the Care Fees Planning website for more information about funding for home care or a care home. Daniel can also visit you at home or you are welcome to meet at his office in Ascot using the following address. Protection & Investment Limited, Index House, St George’s Lane, Ascot, Berkshire SL5 7ET