The real cost of care, and why the system's headline numbers don't tell the whole story.
Last updated: 18 July 2026
Key takeaways
- Self-funders pay around £1,300 a week for residential care and £1,500 a week for nursing care in 2026. Councils pay hundreds of pounds less for the same room.
- England's means-test limits (£23,250 upper, £14,250 lower) have been frozen since 2010, pushing more families into self-funding every year.
- NHS Continuing Healthcare (CHC) covers the entire cost of care with no means test, but it is rarely offered proactively. You can request the checklist yourself.
- NHS-funded Nursing Care (FNC) pays a fixed £267.68 a week toward nursing costs from April 2026. Check that it is on your bill.
- The planned lifetime cap on care costs was scrapped in July 2024, so in England there is currently no ceiling on what a self-funder can pay.
Care home fees have risen by roughly 10% in the last year alone, according to LaingBuisson's analysis of the self-funder market. Meanwhile, the means-test thresholds that decide who qualifies for council help have not moved since 2010. This widening gap, between the real cost of care and a state definition of "affordability" frozen for over a decade, is the defining issue for social care funding in 2026. It is the main reason more families are pushed into self-funding every year, often realising the financial impact only when the first major bills land.
Working out the cost of a care home usually happens during a crisis. It tends to follow a sudden fall, a hospital discharge, or a diagnosis that makes staying at home unsafe. There is rarely enough time to grasp how social care funding works, and the system does not make it easy to navigate. Understanding the different mechanics of council funding, NHS funding, and self-funded care is vital, because confusing them can lead to devastating financial mistakes.
What does a care home actually cost in 2026?
The number most people search for first: a residential care home place currently averages around £1,300 a week for private payers, while nursing care can reach about £1,500, according to carehome.co.uk's 2026 fee data. Over a year, that is roughly £67,600 for residential care and around £78,000 for nursing care.
That average masks a reality the system rarely discusses. Local councils do not pay those rates. According to market analysis from LaingBuisson, councils pay around £908 a week for residential care and about £1,225 a week for nursing care, hundreds of pounds less than self-funding families are charged for the same room in the same building.
This is not just a pricing quirk. It is a structural reality. Councils buy care in bulk and use that leverage to drive rates down, sometimes below the actual cost of providing the care. It is a direct symptom of the local authority funding crisis squeezing adult social care. To bridge the gap, care homes charge self-funders more, typically £200 to £250 a week above the council-commissioned rate. So the "average fee" a family finds online is not a realistic benchmark. It is a blend of a price they will almost certainly exceed and a discounted rate they will never be offered.
Fees also run higher in London and the South East, and a specialist dementia placement can cost significantly more than a standard room even in the same area. A national average is a starting point for a budget. It is never a formal quote.
Why is the means test stuck in the past?
The gap between headline costs and real costs matters more than ever, because the thresholds for council help have been frozen for fifteen years. In England, the upper capital limit has stayed at £23,250 since 2010, and the Department of Health and Social Care has confirmed it will not change for 2026/27. If assets are below £14,250 they are not counted. Between the two limits, the council assumes an extra £1 of weekly income for every £250 of assets, the "tariff income" rule set out in the Care Act charging guidance.
Using the Bank of England's inflation calculator, Community Care has worked out that had these thresholds simply kept pace with inflation since 2010, the upper limit would be closer to £35,000 today. Because the thresholds have not moved while fees have soared, more families are pushed into self-funding every year. Not because their wealth has grown, but because the goalposts stayed still while the cost of care moved on.
These figures vary depending on where you live, so they are not interchangeable:
| Nation | Lower limit | Upper limit | Key point |
|---|---|---|---|
| England | £14,250 | £23,250 | Frozen since 2010. No cap on lifetime costs. |
| Scotland | £22,750 | £36,750 | Free personal and nursing care regardless of savings. |
| Wales | Single threshold | £50,000 | One, more generous, capital limit. |
| Northern Ireland | £14,250 | £23,250 | Largely mirrors the England model. |
These figures are drawn from Care Information Scotland, the Welsh Government's charging guidance, and nidirect's guidance for Northern Ireland, all current as of 2026.
A planned cap on lifetime personal care costs was repeatedly delayed before being scrapped, after the Chancellor announced on 29 July 2024 that the reforms inherited from the previous government would not go ahead. That means in England there is currently no ceiling on what a self-funder might pay over a long-term placement. We argued at the time that a care cap alone was always going to leave too many problems unresolved. If you have heard there is a limit, you are likely hearing about a policy that no longer exists.
If you have heard there is a limit, you are likely hearing about a policy that no longer exists.
What funding route do families miss until it is too late?
There is one pathway that bypasses the means test entirely, yet most families only find it by accident: NHS Continuing Healthcare (CHC). There is no financial assessment for CHC. If a person's needs are judged to be primarily health-based rather than social, the NHS covers the entire package, including accommodation, for as long as it is required. The problem is not that CHC is a secret. It is that it is rarely offered proactively. By the time most families realise it is an option, months of expensive fees have already passed, and that money usually cannot be recovered.
Eligibility happens in two stages. First, a screening checklist looks at 11 "domains" of need, such as mobility, cognition, and continence, as set out in the Department of Health and Social Care's NHS Continuing Healthcare Checklist (July 2022). The bar for this initial check is deliberately low. Passing it does not mean you are funded, it simply means your case is worth investigating further. If it progresses, a multidisciplinary team uses a more detailed Decision Support Tool to decide whether there is a "primary health need." Families do not have to wait for a doctor or hospital to raise this. You can request the checklist yourself. Gathering evidence of daily struggles before the assessment begins can significantly improve the outcome.
Below the CHC tier is another overlooked option: NHS-funded Nursing Care (FNC). This is a fixed weekly payment, confirmed by the Department of Health and Social Care at £267.68 from 1 April 2026, paid directly to the care home to cover part of the nursing costs for anyone in a nursing home with ongoing needs, whether they are self-funding or council-funded. In theory it should apply automatically. In practice, always check your bill. Many families miss out simply because no one told them it existed.
What does this mean for your contract?
All of these factors collide when a family is handed a contract. This is where the abstract world of care funding turns into a concrete, life-altering number on a page.
A weekly fee usually covers the basics: accommodation, meals, laundry, personal care, and simple activities. Extras like hairdressing, podiatry, escorted trips, or room upgrades are often billed separately, and the cost of those add-ons varies widely. A headline price can look competitive until those extras are added, so ask for an itemised list of charges and check it against your original quote before signing.
Before you commit, it is worth checking each of these:
- Private rate versus council rate. Do not assume they are the same for the same room. Ask specifically what the self-funder rate is and what the council-negotiated rate is.
- The annual review policy. Private fees rose by roughly 10% over the past year, according to LaingBuisson, well ahead of the increases councils typically apply. A fee that feels manageable today can become a real burden by the third year, so the review policy matters as much as the starting price.
- NHS Continuing Healthcare. Check whether a CHC checklist has been offered. It costs nothing to ask.
- NHS-funded Nursing Care. Make sure FNC is being applied if nursing is required.
- Future reassessment. Because savings dwindle over time, find out in advance how and when to request a new financial assessment if assets fall toward the threshold, rather than working it out only when it becomes urgent.
If a family chooses a home that charges more than the council's agreed rate, a relative can usually pay the difference. In most circumstances the resident cannot pay that top-up themselves, though there are limited exceptions, so confirm the arrangement with the council before agreeing to it. You do not have to navigate all of this alone. Age UK and Which? both provide free, independent advice, and you have a legal right to a free care needs assessment from your local authority.
What happens next?
The pressures driving these costs are not going away soon. The government's Casey Commission is examining long-term reform of adult social care. Its terms of reference set out a two-phase timetable: phase one reporting in 2026 on how to make better use of existing resources, and phase two, covering long-term transformation, due by 2028. As we have written before, untangling the complexities of NHS and social care reform in England is a long road. Until then, the rising fees and frozen thresholds we see today are not a temporary phase. They are the reality of the current system.
For families weighing their options now, it is best to treat today's costs as something that will persist for the next few years. Build a financial plan around the gap between what you can afford and what support is available, rather than hoping that gap will shrink.
This article is general information, not financial advice. For advice on your own circumstances, speak to a regulated adviser or contact Age UK, Which? or your local authority.
