Care Home Costs 2026: The Complete Guide to What You'll Pay and Who Funds It

Finding out that you or a loved one needs care home support is overwhelming. Finding out what it costs is often devastating. In 2026, the average weekly care home fee in England exceeds £1,300, with nursing care and dementia care costing significantly more. Over a year, that's more than £67,000. And for many families, the question isn't just "how much?" but "who pays?"

The answer depends on your savings, your home ownership status, your care needs, and where you live. The rules are complex, the thresholds are outdated, and the promised reforms have been repeatedly delayed. This guide cuts through the confusion to tell you exactly what you need to know about care home costs in 2026.

Key Statistics

• £1,299 per week: Average care home cost in England (2025)
• £1,449 per week: Average dementia care home cost
• £1,517 per week: Average nursing home cost
• £67,496 per year: Average annual care home cost
• £23,250: Upper capital threshold for means-testing (unchanged since 2011)
• £14,250: Lower capital threshold
• 70%: Percentage of care home residents who self-fund initially

How Much Does a Care Home Cost in 2026?

Care home costs vary significantly depending on the type of care, location, and quality of the home. Here are the current averages:

Regional variations are significant. London and the South East are typically 15-25% more expensive than the North of England or Wales. A care home in Surrey might cost £1,800 per week, while a comparable home in Yorkshire might cost £1,100.

Quality matters. Luxury care homes with en-suite rooms, extensive activities programmes, and higher staff ratios can cost £2,000-£3,000+ per week. Budget homes with shared rooms may cost £900-£1,100 per week.

Who Pays for Care Home Fees?

This is the question that keeps families awake at night. The answer depends on three factors:

1. Your capital and savings 2. Your income 3. Your care needs

The Means Test Explained

When you apply to your local authority for help with care costs, they'll conduct a financial assessment (means test) to determine what you can afford to pay. This looks at:

Capital (savings and assets):

• Bank accounts and savings
• Investments and shares
• Property (with some exceptions)
• Valuable possessions

Income:

• State Pension
• Private/occupational pensions
• Benefits (Attendance Allowance, PIP)
• Any other regular income

The Capital Thresholds

The capital thresholds determine whether you pay for care yourself or receive council support:

Critical point: These thresholds haven't changed since 2011. They weren't increased for 2025-26, and there's no indication they'll rise in 2026-27. In real terms, they've fallen by over 30% due to inflation.

The government's promised £86,000 lifetime cap on care costs, originally scheduled for October 2023, has been indefinitely postponed. In 2026, there is still no cap on how much you might pay.

Do I Have to Sell My House to Pay for Care?

This is the most searched question about care home funding, and the answer is: it depends.

When Your Home IS Counted

Your property is included in the means test if:

• You're moving into permanent residential care
• No one else lives in it

This means if you own a home worth more than £23,250 and no one else is living in it, you'll likely be assessed as a self-funder and expected to use your property to pay for care.

When Your Home is NOT Counted

Your property is disregarded (not counted) if any of the following people still live there:

• Your spouse or civil partner
• A relative aged 60 or over
• A relative who is incapacitated (receiving certain disability benefits)
• A child under 18 whom you're responsible for

Your property is also disregarded:

• For the first 12 weeks of your care home stay (the "12-week property disregard")
• If you're receiving care at home (only residential care triggers property assessment)

The Deferred Payment Scheme

If you do need to use your home to pay for care but don't want to sell it immediately, you can apply for a Deferred Payment Agreement (DPA) with your local authority.

How it works:

• The council pays your care home fees
• A legal charge is placed on your property
• The debt is repaid when you sell the home or die
• Interest is charged on the deferred amount (currently around 3.9%)
• Administrative fees apply

This lets you stay in care without selling your home during your lifetime. The debt is settled from your estate.

Eligibility:

• You must have less than £23,250 in non-property assets
• Your property must have enough equity to cover the fees
• The local authority must agree to offer the scheme

Are Children Responsible for Parents' Care Home Fees?

No. Adult children have no legal obligation to pay for their parents' care home fees. This is a common misconception.

However:

• If you've signed a contract with the care home as a "third-party top-up" guarantor, you may have committed to paying the difference between what the council pays and what the home charges
• If you've made gifts of money or property to family members to avoid paying for care (known as "deprivation of assets"), the local authority can assess you as if you still have those assets

Top-ups explained: If the council agrees to fund your care but will only pay up to their "standard rate" (typically £600-£900 per week), and you want a more expensive home, someone (usually a family member) must pay the difference. This is called a "third-party top-up." The family member signs an agreement with the council, not the care home.

Do Dementia Patients Have to Pay for Care?

Yes, dementia patients are subject to the same means-testing rules as everyone else. Having dementia does not automatically entitle you to free care.

However, there are some additional considerations:

NHS Continuing Healthcare (CHC)

If your care needs are primarily health-related (rather than social care), you may qualify for NHS Continuing Healthcare, which is fully funded by the NHS. This is assessed based on:

• The nature of your needs
• The intensity of your needs
• The complexity of your needs
• The unpredictability of your needs

People with advanced dementia sometimes qualify for CHC, but it's not guaranteed. Only around 3% of care home residents receive full CHC funding.

Funded Nursing Care (FNC)

If you're in a nursing home (with registered nurses on site), the NHS pays a contribution toward your nursing care costs regardless of your financial situation. In 2025-26, this is:

• Standard rate: £254.06 per week
• Higher rate: £349.50 per week (for those with more complex nursing needs)

This is paid directly to the care home and reduces what you pay, but it doesn't cover the full cost.

The Self-Funder Trap

Approximately 70% of care home residents start as self-funders. But what happens when the money runs out?

The Cliff Edge

When your capital falls below £23,250, you can apply to your local authority for funding support. But there's a problem: councils typically pay care homes less than self-funders do.

Average fees paid:

• Self-funders: £1,299+ per week
• Local authority funded: £700-£900 per week

This creates a two-tier system. Many care homes charge self-funders more to subsidise council-funded residents. When you become council-funded, you may be asked to:

• Move to a cheaper room
• Accept reduced services
• Move to a different care home entirely

Some homes won't accept council-funded residents at all, or have very limited spaces for them.

How to Prepare

If you're self-funding, plan ahead:

• Calculate how long your funds will last at current rates
• Speak to the care home about what happens when you need council funding
• Apply to the council at least 3 months before your capital falls below £23,250
• Consider whether the home will accept council rates with a top-up

Regional Variations in Care Home Costs

Care home costs vary dramatically across the UK:

Scotland and Wales have different rules:

• Scotland: Personal care is free for over-65s regardless of means (nursing care still means-tested)
• Wales: Capital thresholds are slightly higher (£50,000 upper limit)

What Benefits Can Help with Care Costs?

Several benefits can contribute to care costs:

Attendance Allowance

If you're over State Pension age and need help with personal care:

• Lower rate: £72.65 per week
• Higher rate: £108.55 per week

This is not means-tested and can be used toward care costs. However, it stops when you move into a care home funded by the local authority (after 4 weeks).

Pension Credit

If you have limited income, Pension Credit can boost your weekly income. It's also a gateway to other benefits.

NHS-Funded Nursing Care

As mentioned, if you're in a nursing home:

• Standard: £254.06 per week
• Higher: £349.50 per week

This is paid regardless of your means.

Personal Expenses Allowance

If the council funds your care, you're entitled to keep a minimum amount for personal expenses:

• 2025-26: £30.15 per week

This covers toiletries, clothes, hobbies, and other personal spending.

Questions to Ask When Comparing Care Homes

Before committing to a care home, ask about costs and fees:

How to Challenge Care Funding Decisions

If you disagree with your financial assessment or the level of funding offered:

1. Request a detailed breakdown of how your assessment was calculated

2. Ask for a reassessment if your circumstances have changed

3. Challenge any assets you believe should be disregarded

4. Complain formally to the local authority if you believe they've made an error

5. Contact the Local Government Ombudsman if the complaint isn't resolved

6. Seek legal advice for complex cases involving property or deprivation of assets

Free advice is available from:

• Age UK: 0800 055 6112
• Citizens Advice: citizensadvice.org.uk
• Independent Age: 0800 319 6789

Care Home Costs: What's Changing in 2026?

What's NOT Changing

• Capital thresholds remain frozen at £23,250 and £14,250
• No lifetime cap on care costs (originally promised for 2023)
• Means-testing continues as before
• Property rules unchanged

What IS Changing

• NHS-Funded Nursing Care rates increased by 7.7% in April 2025 and may rise again in April 2026
• Better Care Fund initiatives aim to keep more people out of care homes
• Fair Pay Agreement (from October 2026) may eventually increase care worker wages, potentially pushing up fees

The Long-Term Outlook

Baroness Louise Casey is leading an independent commission to develop recommendations for a "National Care Service." However, major reform is unlikely before 2027 at the earliest, and funding remains the fundamental unresolved question.

For now, families face a system where:

• Thresholds are outdated
• Self-funders subsidise council-funded residents
• There's no cap on costs
• Quality varies enormously
• Advice is hard to find

Key Data Summary

Methodology

This guide is based on:

• Official government guidance on social care charging 2025-26
• Care home fee surveys from carehome.co.uk and other industry sources
• Age UK and Independent Age guidance for older people
• NHS England data on funded nursing care
• Local authority charging policies and procedures

All figures are for England unless otherwise stated. Scotland, Wales, and Northern Ireland have different rules and thresholds.