Care Funding in England: who pays and what support is available

In this collaboration with our partners at Podplan, the digital platform that helps families make informed decisions and plan ahead, we explain how care funding in England works, who may pay, and what families may need to consider next.

Care funding in England can be confusing, particularly when you’re trying to understand how the system works at what may already be a difficult time for your family. A good place to start is understanding that who pays for care depends on the type of care someone needs and, in some cases, their financial circumstances. Broadly, care funding falls into three main areas:

• NHS-funded care;
• local authority-funded care, and
• privately funded care.

Understanding the difference between these routes can help you ask the right questions, challenge incorrect assumptions and plan ahead with more confidence.

The NHS

NHS Continuing Healthcare, often called CHC, is a package of ongoing care arranged and funded solely by the NHS for adults who are assessed as having a primary health need. If someone qualifies, CHC can cover the full cost of their assessed care package, including care provided in their own home or care home accommodation. Crucially, eligibility is based on the nature and extent of someone’s needs – not their income, savings or property.

This is where confusion often starts. CHC is different from NHS-funded Nursing Care, which is a smaller contribution paid by the NHS towards the cost of registered nursing care in a nursing home. CHC, by contrast, can cover the full cost of someone’s assessed care package if they are eligible. It should be considered where someone’s needs may indicate a primary health need, including where needs are complex, intense or unpredictable. Families may need to ask whether a CHC assessment has been considered, rather than assume it will happen automatically. In most cases, the process begins with a simple checklist and, where appropriate, progresses to a full assessment.

Local authority-funded care

If someone does not qualify for NHS Continuing Healthcare, their local authority may carry out a care needs assessment and, where relevant, a financial assessment. The care needs assessment considers what support the person requires. The financial assessment looks at their income, savings and other assessable assets to determine what they may need to contribute towards the cost.

For the 2026/27 financial year in England, the upper capital limit remains £23,250. If someone has assessable assets above this level, they are generally expected to fund their own care. If their assets fall below this threshold, local authority support may become available, although income and other rules will still be considered.

Self-funded care and the family home

Where someone is responsible for funding their own care, they may pay privately until their assessable assets fall below the relevant threshold. However, not every asset will necessarily be treated in the same way. For example, the family home is not normally included in the means test while a spouse, partner or certain dependent relatives continue to live there.

There are other situations where the value of a property may also be left out of the financial assessment.

For example, when someone moves permanently into a care home and their property would normally be included, a 12-week property disregard may apply. This means the value of the home is temporarily excluded from the financial assessment, giving the person and their family some time to consider their longer-term options.

After this period, a Deferred Payment Agreement may be an option for those who are eligible. This allows some care costs to be deferred against the value of the property, rather than having to sell the home straight away. It works much like a loan from the local authority and can include interest and administration charges, so it’s important to understand the longer-term financial implications.

Third-party top-ups

If the local authority agrees to fund a care home place, but the family would prefer a more expensive option, a third-party top-up may be needed. This is usually paid by a third party, such as a family member, rather than the person receiving care. It is important to understand that a top-up can be an ongoing financial commitment, not simply a one-off payment. Any arrangement should therefore be formally agreed with the local authority so that everyone understands what they are committing to and what could happen if the cost of the placement increases.

Why families can miss out on support

One of the biggest sources of confusion around funding is the assumption that all care in later life is means-tested. It isn’t. NHS Continuing Healthcare is based on someone’s assessed health and care needs, not their wealth. Families can sometimes begin paying privately for care without realising that a CHC assessment could have been requested first.

If CHC eligibility is refused and the person or their family disagrees with the decision, there are routes for asking for the decision to be reviewed.

The process can feel complicated, particularly when a family is already dealing with a health crisis, which is why understanding the different funding routes as early as possible can make such a difference.

How financial planning can help

The earlier care funding is discussed, the more opportunity there is to understand the options and prepare for different scenarios.

Financial planning can help you understand what care might cost, how different assets could be treated and how income, savings and investments might be used if care is needed later in life.

A financial planner can also work alongside legal and care specialists to help families consider Lasting Powers of Attorney, estate planning, cash flow modelling and the potential financial impact of different funding routes.

No one can predict exactly what care they may need in the future. But understanding the possibilities – and having the right arrangements in place – can make difficult decisions considerably easier if the time comes.

The bottom line: The NHS does not automatically fund all care in later life – but neither should families assume that care will automatically have to be paid for privately. The starting point is understanding what kind of care is needed and why. From there, understanding the difference between NHS Continuing Healthcare, NHS-funded Nursing Care, local authority support and self-funding can help you ask better questions, understand your options and make more informed decisions.

Looking for later life financial planning support? 

Several of our Lifestyle Financial Planners at Attivo are accredited with the Society of Later Life Advisers (SOLLA) – the Gold Standard for those advising in the later life market. We can help you explore your later life goals, map out different scenarios and create a financial plan that brings together your income, investments, estate planning and family priorities.