Care Home Funding Options: Complete Guide 2025 - Self-Pay, Council & NHS

Paying for care home fees is one of the biggest financial challenges families face. With costs ranging from £900-£1,800/week (£46,800-£93,600/year), understanding your funding options is crucial. This guide explains every funding route available in Gloucestershire for 2025.

Quick Reference: Am I Eligible?

Self-Funding (Private Pay):
✅ You pay if savings/assets exceed £23,250

Council Funding (Local Authority):
✅ You qualify if savings/assets under £23,250

NHS Continuing Healthcare:
✅ You qualify if primary need is healthcare (not social care)

NHS-Funded Nursing Care:
✅ Automatic £219.52/week if in nursing home

Attendance Allowance:
✅ Available if aged 65+ needing care (not means-tested)

Understanding the £23,250 Threshold

What Counts as Assets?

Included in Financial Assessment:
- Savings in bank accounts
- ISAs, bonds, and investments
- Property value (if not occupied by spouse/partner)
- Second properties or rental properties
- Premium bonds
- Valuable possessions (jewelry, art over £500)

Excluded:
- Your home IF spouse/partner still lives there
- Your home IF relative aged 60+ or disabled dependent lives there
- Personal possessions (furniture, clothing)
- Life insurance policies
- Personal injury compensation (some cases)

Capital Bands 2025

£0-£14,250:
- Full council funding (no contribution from savings)
- Council pays agreed rate

£14,250-£23,250:
- Partial contribution required
- £1 assumed income for every £250 savings above £14,250
- Example: £20,000 savings = £24/week contribution

Over £23,250:
- Self-funding required
- Pay full care home costs yourself
- Can still apply for NHS Continuing Healthcare

Option 1: Self-Funding (Private Pay)

Who Self-Funds?

You self-fund if:
- Savings/assets exceed £23,250
- Property value pushes you over threshold
- Choose to pay privately even if eligible for help
- Want full choice of care homes

Gloucestershire Reality:
- 60-70% of care home residents self-fund initially
- Many transition to council funding when savings deplete

Advantages of Self-Funding

Full Choice:
- Any care home accepting private residents
- No waiting for council approval
- Move quickly when needed
- Change homes if unsatisfied

Better Negotiation:
- Private payers have leverage
- May negotiate fees
- Priority access to premium rooms
- More flexibility on terms

No Means Test:
- Privacy maintained
- No financial disclosure to council
- Simpler process
- Faster placement

Self-Funding Costs (Gloucestershire 2025)

Residential Care:
- Budget: £900-£1,300/week
- Average: £1,050/week (£54,600/year)
- 3-year stay: £163,800

Nursing Care:
- Budget: £1,200-£1,700/week
- Average: £1,425/week (£74,100/year)
- 3-year stay: £222,300

Dementia Care:
- Budget: £1,100-£1,800/week
- Average: £1,450/week (£75,400/year)
- 3-year stay: £226,200

Financial Planning for Self-Funders

Calculate How Long Funds Last:

Example 1: £150,000 savings, £1,200/week home
- £150,000 ÷ £62,400/year = 2.4 years
- Then transition to council funding

Example 2: £300,000 property sale, £1,500/week home
- £300,000 ÷ £78,000/year = 3.8 years
- May last full lifetime in care

Budget for Fee Increases:
- Expect 4-6% annually
- Year 1: £1,200/week
- Year 3: £1,350/week (+5% annual)
- Year 5: £1,528/week
- Plan conservatively

When Self-Funding Ends

Running Out of Money:
When savings fall to £23,250:
1. Apply for council funding
2. Financial assessment conducted
3. Transition to council rates
4. May need to move if current home doesn't accept council funding
5. Council pays going forward

Plan Ahead:
- Apply 3-6 months before funds deplete
- Check current home accepts council funding
- Have backup homes identified

Option 2: Council Funding (Local Authority)

Gloucestershire County Council Funding

Eligibility Criteria:
1. Financial:
- Assets under £23,250
- Income assessed separately

2. Care Needs:
- Care needs assessment
- Meet "substantial" care needs criteria
- Cannot safely remain at home

Application Process

Step 1: Care Needs Assessment
Contact: 01452 426868

What happens:
- Social worker visits
- Assesses daily living abilities
- Determines care level needed
- Takes 2-4 weeks

Step 2: Financial Assessment
Contact: 01452 583600

What's assessed:
- All savings and assets
- Property value (unless exceptions apply)
- Income (pension, benefits)
- Takes 2-4 weeks

Step 3: Funding Decision
Council decides:
- Full funding (assets under £14,250)
- Partial funding (£14,250-£23,250)
- No funding (over £23,250)

Timeline: 6-12 weeks total from application to decision

Gloucestershire Council Rates 2025

What Council Pays:
- Residential care: £725/week maximum
- Nursing care: £875/week maximum
- Dementia care: £825/week maximum

The Reality:
Most Gloucestershire homes charge more:
- Residential: £900-£1,300/week
- Nursing: £1,200-£1,700/week

Top-Up Fees Required:
- Residential: £175-£575/week shortfall
- Nursing: £325-£825/week shortfall
- Family pays difference

Top-Up Fees Explained

What Are Top-Ups?
When chosen home costs more than council pays, family/resident pays the difference.

Example:
- Care home charges: £1,100/week
- Council pays: £725/week
- Top-up needed: £375/week (£19,500/year)

Who Can Pay Top-Ups?
- Family member (most common)
- Resident from income (pension)
- Friend or charity
- Cannot be resident from capital (unless over £23,250)

Top-Up Agreement:
- Written contract required
- Must be sustainable long-term
- Reviewed annually
- If payer stops, resident may need to move

Warning: Only agree to top-ups you can afford indefinitely.

Gloucester vs Cheltenham for Council-Funded

Gloucester Advantage:
- Lower home costs (£900-£1,500/week)
- Smaller top-ups needed (£175-£775/week)
- More homes accept council funding
- Better value for families

Cheltenham Challenge:
- Higher costs (£1,000-£1,800/week)
- Larger top-ups (£275-£1,075/week)
- Fewer homes at council rates
- May need to consider Gloucester instead

Option 3: NHS Continuing Healthcare (CHC)

What is NHS Continuing Healthcare?

100% NHS-funded care for those with complex health needs where the primary need is healthcare, not social care.

If Approved:
- NHS pays full care home costs
- No means test
- No contribution from you
- Can choose from available homes

Success Rate:
- Only 15-20% applications approved
- Worth applying if eligible
- Can appeal if rejected (40% appeals succeed)

Who Qualifies for NHS CHC?

Primary Health Need Test:
Your loved one's main need must be healthcare, not just personal care.

Qualifying Conditions Often Include:
- Complex medical conditions requiring nursing
- Palliative/end-of-life care needs
- Severe dementia with behavioral challenges
- Multiple health conditions requiring coordination
- Frequent medical interventions needed
- Unstable health requiring monitoring

Examples That Often Qualify:
- Advanced Parkinson's with swallowing difficulties
- Severe dementia with aggression requiring specialist management
- Multiple conditions: diabetes, heart failure, COPD needing daily nursing
- Terminal illness/palliative care
- Recent stroke with complex needs

Less Likely to Qualify:
- Stable residential care needs
- Personal care only (washing, dressing)
- Social isolation
- Dementia alone without complex health issues

NHS CHC Assessment Process

Step 1: Request Assessment
Who can request:
- GP
- Hospital discharge team
- Care home (current)
- Family member
- Social worker

How: Contact GP or call Gloucestershire ICB: 0300 421 8181

Step 2: Checklist Assessment
Initial screening (2-4 weeks):
- Nurse completes checklist
- Determines if full assessment warranted
- 2+ "severe" scores or 5+ "high" scores = proceeds

Step 3: Full Assessment
Multidisciplinary team (4-8 weeks):
- Nurses, doctors, therapists assess
- Score across 12 domains
- Care needs: Nature, Intensity, Complexity, Unpredictability
- Recommendation made

Step 4: Decision
Clinical Commissioning Group (2-4 weeks):
- Reviews assessment
- Makes final decision
- Informs family in writing

Total Timeline: 3-6 months typical

If NHS CHC is Refused

Appeal Process:
1. Local Resolution (28 days to request)
- ICB reviews decision
- Takes 6-8 weeks
- 20% succeed

2. Independent Review Panel (6 months to request)
- Independent panel hears case
- Takes 3-6 months
- 40% succeed at this stage

3. Parliamentary Ombudsman (final route)
- If all else fails
- Takes 6-12 months

Get Help:
- Free NHS CHC advocacy: Age UK, Beacon
- Specialist solicitors (if complex)

Meanwhile:
- You must continue paying
- Can claim retrospectively if eventually approved
- Keep all receipts

Option 4: NHS-Funded Nursing Care (FNC)

Automatic for Nursing Homes

What Is It?
£219.52/week (2025 rate) paid by NHS toward registered nursing costs in nursing homes.

Who Gets It:
- Anyone in nursing home (not residential)
- Automatic - home arranges
- No means test
- Paid directly to care home

Impact on Your Costs:

Example:
- Nursing home fee: £1,400/week
- NHS FNC: -£219.52/week
- Your cost: £1,180.48/week

Annual Saving: £11,415

Not Available For:
- Residential care homes (no nurses)
- Dementia residential care (unless nursing level)

Check:
Ensure care home has applied for FNC - it should be automatic but verify it's deducted from your invoice.

Option 5: Deferred Payment Agreements

What is a Deferred Payment?

Avoid Forced House Sale:
Council pays care home fees, secured as debt against your property. Property sold later (when empty or after death), council repaid.

Who Qualifies:
- Own property
- Assets under £23,250 (excluding property)
- No one else living in property (exceptions for spouse)
- Property value sufficient to cover fees
- Gloucestershire resident

How Deferred Payments Work

Process:
1. Apply to Gloucestershire County Council
2. Property valued
3. Council pays care home
4. Debt accrues against property
5. Interest charged (2.65% typical)
6. Property eventually sold
7. Council repaid from proceeds

Costs:
- Interest: 2.65% on deferred amount
- Administration fee: £585 initial + £325 annually
- Valuation fee: £250-£400

Example:
- Care home: £1,200/week (£62,400/year)
- 3 years in care: £187,200
- Interest (2.65%): £15,000
- Fees: £1,500
- Total debt: £203,700

Property must be worth significantly more than care costs.

Advantages

No Forced Sale:
- Keep home during lifetime
- Property can be inherited (after debt paid)
- Time to sell at best price

Maintains Choice:
- Access better care homes
- Don't need immediate funds
- Bridge to property sale

Disadvantages

Interest Accumulates:
- 2.65% annual interest
- Debt grows substantially over years
- Reduces inheritance

Not Free Money:
- Must be repaid
- Property ultimately sold
- Family inheritance reduced

Property Must Cover Debt:
- If property value insufficient, issues arise
- Falling property prices risky

Option 6: Attendance Allowance

What is Attendance Allowance?

Tax-free benefit for people aged 65+ who need help with personal care due to illness or disability.

Rates (2025):
- Lower rate: £72.65/week (£3,778/year)
- Higher rate: £108.55/week (£5,645/year)

Not Means-Tested:
- Doesn't matter how much you have in savings
- Doesn't matter what income you have
- Free money if eligible

Who Qualifies?

Criteria:
- Aged 65 or over
- Need help with personal care (washing, dressing, eating)
- OR need supervision to stay safe
- For at least 6 months
- Physically or mentally disabled

Lower Rate:
Need help either day OR night

Higher Rate:
Need help both day AND night
OR terminally ill

Cannot Claim If:
- Already in care home funded by council
- Can claim if self-funding
- Can claim if paying top-ups

Application

Apply:
- Download form: gov.uk/attendance-allowance
- Call: 0800 731 0122
- Takes 4-6 weeks to process

Use For:
- Help pay care home fees
- Any purpose you choose
- Increases income for means test

Combining Funding Sources

Common Combinations

Combination 1: Self-Funding + NHS-FNC
- You: £1,200/week nursing home
- NHS FNC: -£219.52/week
- Your cost: £980.48/week
- Save: £11,415/year

Combination 2: Council + Top-Up + Attendance Allowance
- Care home: £1,100/week
- Council pays: £725/week
- Top-up needed: £375/week
- Attendance Allowance: £108.55/week
- Family pays: £266.45/week
- Allowance reduces burden 29%

Combination 3: Self-Funding Then Council
- Years 1-2: Self-fund £1,200/week
- Savings deplete to £23,250
- Years 3+: Council funding starts
- Transition planned

Financial Planning Timeline

12 Months Before Care Needed

Actions:
- Review financial situation
- Get property valued
- Organize financial documents
- Consult financial advisor
- Research care home costs
- Consider immediate needs annuity (if appropriate)

6 Months Before

Actions:
- Request care needs assessment
- Apply for Attendance Allowance
- Check NHS CHC eligibility
- Get 3-4 care home quotes
- Calculate funding gap

3 Months Before

Actions:
- Apply for council funding (if eligible)
- Arrange top-up agreements
- Set up Deferred Payment (if using)
- Open dedicated account for fees
- Arrange direct debits

Move-In Week

Actions:
- Sign care home contract
- Confirm payment method
- Verify NHS-FNC applied for (nursing homes)
- Keep all receipts
- Set up tracking spreadsheet

Common Mistakes to Avoid

1. Gifting Assets to Qualify

Mistake: Transferring property or money to family to get below £23,250 threshold.

Problem: "Deliberate deprivation of assets" - council can still count assets and pursue family members.

Solution: Get proper legal advice before any transfers.

2. Assuming You'll Get Council Funding

Reality: 60-70% self-fund initially. Check eligibility realistically.

3. Not Applying for NHS CHC

Mistake: Assuming you won't qualify so not bothering.

Solution: Always apply if health needs are complex - it's free and can save £75,000/year.

4. Agreeing to Unsustainable Top-Ups

Problem: Family agrees to pay £500/week top-up they can't afford long-term.

Solution: Only agree to what you can sustain for 3-5 years. Resident may need to move if top-up stops.

5. Not Reading Contracts

Problem: Hidden fee increases, notice periods, or additional costs.

Solution: Read care home contract thoroughly. Get legal advice if unsure.

Gloucestershire-Specific Resources

Council Contacts

Care Needs Assessment:
- Phone: 01452 426868
- Online: gloucestershire.gov.uk/adult-social-care

Financial Assessment:
- Phone: 01452 583600
- Email: socialcare.finance@gloucestershire.gov.uk

Deferred Payments:
- Phone: 01452 583600
- Apply through adult social care

NHS Contacts

NHS Continuing Healthcare:
- Gloucestershire ICB: 0300 421 8181
- Email: gloucestershire.chc@nhs.net

NHS-Funded Nursing Care:
- Arranged by care home
- Query: 0300 421 8181

Free Advice Services

Age UK Gloucestershire:
- Phone: 01452 422660
- Free benefits advice
- CHC application support

Citizens Advice Gloucestershire:
- Phone: 0808 800 0510
- Free financial advice
- Benefits checks

Independent Age:
- National helpline: 0800 319 6789
- Free advice guides

Frequently Asked Questions

How much should I budget for care home costs in Gloucestershire?
Budget £1,000-£1,500/week (£52,000-£78,000/year) for quality care. Gloucester offers better value (£900-£1,500/week) than Cheltenham (£1,000-£1,800/week).

What if I run out of money while self-funding?
When savings reach £23,250, apply for council funding. You'll transition to council rates. Your current home must accept council funding or you'll need to move.

Can I keep my house if my spouse still lives there?
Yes. Property is disregarded from financial assessment if spouse/partner resides there. You may still qualify for council funding.

How long does council funding application take?
6-12 weeks typical. Care needs assessment (2-4 weeks) + financial assessment (2-4 weeks) + decision (2-4 weeks). Apply early.

Is it worth applying for NHS Continuing Healthcare?
Absolutely. Even with 15-20% success rate, it saves £50,000-£75,000/year if approved. Always worth trying. Free to apply.

What happens to my pension when in a care home?
You keep your pension. It counts as income in means test. If council-funded, you keep £28.25/week "personal expenses allowance," rest goes to care costs.

Can I choose any care home with council funding?
No. Limited to homes accepting council rates (£725/week residential). Family can pay top-up for pricier homes, but must be sustainable.

How do I know if a care home is worth the cost?
Check CQC rating ("Good" minimum), visit in person, observe staff-resident interactions, compare facilities. Our directory helps compare Gloucestershire homes.

Conclusion

Care home funding is complex, but understanding your options empowers better decisions. Most Gloucestershire families use a combination of funding sources over time.

Key Takeaways:

- Self-funding if assets over £23,250 - budget £52,000-£78,000/year
- Council funding if under £23,250 - expect top-ups of £175-£825/week
- NHS CHC always worth applying - saves £50,000-£75,000/year if approved
- NHS-FNC automatic for nursing homes - saves £11,415/year
- Attendance Allowance claim if self-funding - £3,778-£5,645/year
- Deferred Payment avoids forced house sale - but interest accrues
- Plan ahead - start 6-12 months before care needed
- Get advice - use free resources (Age UK, Citizens Advice)

Start Your Journey:

Browse our Cotswolds care homes directory to compare costs across Cheltenham, Gloucester, Cirencester, Stroud, and Tewkesbury. Filter by care type and budget to find quality care within your financial means.

Understanding funding empowers you to plan confidently and find the best care for your loved one.