What is the capital limit for self-funding care in England?

As of April 2024, if your capital (savings, investments, etc.) is above £23,250, you are generally expected to pay the full cost of your care. This threshold is subject to change, so always check with your local authority or a financial adviser.

Does my home always count towards the financial assessment for care?

If you are moving permanently into a care home, your home is usually included in the financial assessment unless certain people (like a spouse, partner, or dependent relative) still live there. For home care, your property is not usually included. This is a complex area, and professional advice is highly recommended.

Can I get a care needs assessment even if I'm self-funding?

Yes, absolutely. Your local authority has a duty to provide a free care needs assessment regardless of your financial situation. This assessment will identify your care requirements and help you choose appropriate care services.

What is NHS Continuing Healthcare (CHC)?

NHS Continuing Healthcare (CHC) is a package of care arranged and funded solely by the NHS for individuals with a 'primary health need'. It is not means-tested, meaning your financial assets are not considered. If eligible, the NHS covers 100% of care costs. If you have significant health needs, you should explore eligibility for CHC.

Self-Funding Care: What You Need to Know

Self-Funding Care: Understanding Your Options

Navigating the world of care can be a daunting experience, especially when it comes to understanding how it will be funded. For many families in the UK, the reality is that they will need to contribute towards the cost of care, often becoming what is known as a 'self-funder' or 'private pay' client. This comprehensive guide aims to demystify self-funding care, helping you understand what it means, when it applies, and how to plan effectively.

Deciding on care for a loved one, or for yourself, is a significant emotional journey. Adding financial considerations to this can feel overwhelming. Our goal is to provide clear, actionable information, empowering you to make informed decisions and ensure the best possible care is received.

What Does 'Self-Funding' Mean?

In the context of adult social care in the UK, 'self-funding' means that you or your loved one will be responsible for paying the full cost of your care, whether that's care at home, residential care, or nursing home care. This usually happens when your financial assets, including savings, investments, and property, exceed a certain threshold set by your local authority.

It's important to understand that local authorities have a duty to assess your care needs and your financial circumstances. While they will assess your needs regardless of your finances, the financial assessment (sometimes called a means test) determines whether they will contribute to the cost of your care.

The Financial Thresholds

The financial thresholds for receiving local authority funding for care are set by central government but applied by your local council. These thresholds can change, so it's always best to check the most current figures with your local authority or a financial adviser specialising in care funding. As of April 2024 (and subject to change):

If your capital (savings, investments, etc.) is above £23,250, you are generally expected to pay the full cost of your care.
If your capital is between £14,250 and £23,250, you will be expected to contribute to the cost of your care from your capital, on a sliding scale, as well as from your income.
If your capital is below £14,250, your capital will not be taken into account, but your income will be assessed to see how much you can contribute.

Your home is usually included in the financial assessment if you are moving permanently into a care home, unless certain people (like a spouse or dependent relative) still live there. For home care, your property is not usually included in the financial assessment. This is a complex area, and professional advice is highly recommended.

When Might You Become a Self-Funder?

You will typically become a self-funder if:

Your assets (including savings, investments, and potentially your property if moving into residential care) exceed the upper capital limit (£23,250 in England for 2024/25).
You choose not to have a financial assessment and prefer to arrange and pay for your care privately.
You are eligible for local authority funding but choose a care home or service that costs more than the local authority is willing to pay, and a 'third-party top-up' is not available or affordable. In this scenario, you wouldn't be a full self-funder but would be paying the difference.

The Benefits and Challenges of Self-Funding

Potential Benefits

Greater Choice and Flexibility: As a self-funder, you often have a wider range of care homes and home care providers to choose from, as you are not restricted by local authority funding rates.
Faster Access to Care: You may be able to arrange care more quickly, as you won't need to wait for local authority assessments and funding approvals.
More Control: You have more direct control over the type, level, and specifics of the care you receive.
No Means Test Hassle: If you prefer, you can bypass the local authority financial assessment process entirely, though it's often wise to have an assessment to understand your entitlements.

Potential Challenges

Significant Financial Outlay: Care costs can be very high, and self-funding can quickly deplete savings and assets.
Complexity of Funding Options: Understanding annuities, equity release, and other financial products can be complex.
Risk of Running Out of Funds: If your funds run out, you will then need to apply for local authority funding, which can be a stressful transition.
Finding the Right Care: Even with more choice, identifying the right care provider that meets all needs can still be challenging.

Planning for Self-Funded Care

Proactive planning is crucial when considering self-funded care. Here are key steps to take:

1. Understand Your Current Financial Situation

Gather all financial information, including details of savings, investments, pensions, property value, and any other assets. This will give you a clear picture of what you have available.

2. Research Care Costs in Your Area

Care costs vary significantly by region and type of care. Contact local care homes and home care agencies to get an idea of average weekly or monthly fees. Our platform, Care Directory UK, can help you compare providers and their indicative costs.

3. Consider All Funding Avenues

Savings and Investments: These are usually the first port of call for self-funders.
Income: Pensions (state, private, and occupational) and other regular income will be used to pay for care.
Property: If moving into residential care, your home may need to be sold, or you might consider options like equity release or a deferred payment agreement with the local authority (if eligible).
Care Annuities/Immediate Needs Annuities: These are specialised insurance products that provide a guaranteed income for life to cover care costs, in exchange for a lump sum. They can be complex and are best explored with a specialist financial adviser.
Attendance Allowance/Personal Independence Payment (PIP): These benefits are not means-tested and can contribute towards care costs, even if you are a self-funder. It's vital to check eligibility.
NHS Continuing Healthcare (CHC): This is a non-means-tested funding package provided by the NHS for individuals with a 'primary health need'. If eligible, the NHS covers 100% of care costs, regardless of your assets. This assessment is separate from local authority assessments and should always be explored if there are significant health needs.

Be aware that local authorities have rules about 'deprivation of assets'. This means if you deliberately reduce your assets (e.g., by giving away money or property) to avoid paying for care, the local authority can still treat you as if you still own those assets and expect you to pay. Seek independent financial advice before making any significant financial decisions.

4. Seek Professional Advice

This is perhaps the most important step. Specialist financial advisers, often called 'care fees advisers' or 'elderly care financial planners', can provide tailored advice on navigating care funding. They are regulated by the Financial Conduct Authority (FCA) and can help you understand complex financial products and maximise your entitlements.

What Happens if Your Funds Run Out?

It's a common concern: what if your savings run out while you're self-funding care? This is a critical point to plan for. If your assets fall below the local authority's upper capital limit, you should inform your local council immediately. They have a duty to reassess your financial situation and conduct a care needs assessment.

The local authority will then determine if you are eligible for financial assistance. If you are, they will contribute to your care costs. It's important to note that they may not fund the exact care home or service you are currently using if its fees are higher than their standard rate. In such cases, you might need to find a care home that accepts the local authority rate, or a 'third-party top-up' might be required from a family member.

Even if you are currently a self-funder, it's wise to plan for the possibility of your funds depleting. A specialist financial adviser can help you project how long your funds might last and what steps to take if they run low.

Practical Steps for Self-Funders

Get a Care Needs Assessment: Even if you are self-funding, request a care needs assessment from your local authority. This is free and will identify your care requirements, which can help you choose the right care provider.
Understand Your Rights: Familiarise yourself with the Care Act 2014, which outlines local authorities' duties regarding care and support.
Power of Attorney: Ensure Lasting Power of Attorney (LPA) for Health and Welfare and Property and Financial Affairs is in place. This allows trusted individuals to make decisions on your behalf if you lose mental capacity.
Review Care Contracts Carefully: Before signing any contract with a care provider, read it thoroughly. Understand what's included, what's extra, and the terms for fee increases or changes in care needs.
Keep Records: Maintain detailed records of all financial transactions related to care, as well as communications with care providers, local authorities, and financial advisers.

Self-funding care can be a complex journey, but with careful planning and professional guidance, you can ensure that you or your loved one receives the best possible care without undue financial stress. Remember, you don't have to navigate this alone.

Need Help and Support?

Navigating care funding can be complex. Don't hesitate to reach out to professionals for guidance:

Your Local Council Adult Social ServicesVisit →

Age UK - Advice on Care Home FeesVisit →

Society of Later Life Advisers (SOLLA) - Find a Specialist Financial AdviserVisit →

Citizens Advice - Help with Care CostsVisit →

NHS Continuing Healthcare (CHC) InformationVisit →

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