If you are looking into the possibility of a care home for your loved one, you have probably wondered how this care can be funded. The fees that are charged can vary depending on the type of care that is provided. It could be that your loved one is needing residential care, nursing care, or dementia care. As you explore these options, it soon becomes clear that the costs can soon add up.

The good news is that there are numerous ways that you can fund your loved ones’ stay at care homes, such as St Michael’s. We’re going to run through the options that exist so that you can explore which is best suited to you.

Private funding

One of the most common ways of funding a care home is using your loved ones’ own private funds.

There are numerous ways that care can be privately funded. The most obvious of these could involve the sale of your loved ones’ home. However, there are other routes to explore such as:

Pension income and drawdown
A pension is there to fund retirement. If a loved one moves into a care home then you can explore how their pension might fund this. This can be done by utilising the pension income and transferring it to a drawdown product.

Equity release
If your loved ones’ property has equity, it is possible to use this rather than actually sell. You can explore options such as lifetime mortgages and home reversion. To pursue this route, you will need to take independent financial advice to make sure that you’re fully aware of what is involved.

Private savings
It could be that your loved one is in a position where they have savings. If so, these can be used to fund their care. It is worth looking at how long these savings will last and ensure there is a plan in place for if they are all used.


NHS funding

Known as continuing healthcare funding, this is provided by the NHS and generally only applies to someone who has ongoing, and complex, care needs. Understanding if your loved one is eligible for this funding is not always easy and you will find that the requirements are updated relatively frequently.


Local Authority

If you want to look into Local Authority funding, your loved one will need to undergo a needs assessment. It is this assessment that will determine the extent of any care that may be needed, as well as how much support you can get towards the costs.

Types of Local Authority funding include:

Partially funded: Where the resident / family pay a set amount per month, in addition to the amount funded by Local Authority.

Deferred funding: Where the Local Authority will cover the fees for a resident whilst awaiting a property sale, at which point the resident will be converted to a self-funded resident.

12-week disregard funding: The Local Authority will either fully fund or partially fund a resident for 12 weeks before the resident is converted to a Self-Funded, Local Authority Fully Funded, or Local Authority Partially Funded Resident.


If your loved one is in a position where they have savings that go above £23,250 it is highly unlikely that they will be eligible for this funding and will need to explore the private funding options above.


If you would like to discuss funding your loved one’s care in more detail, please call us on 01843 240 760.