Funding & Costs Explained

How Much Does Dementia Care Actually Cost?

Care Home Fees Hit Hard

Residential care costs between £600 and £1,000 per week across most of the UK. That adds up fast when you work out the annual bill. Nursing care costs more because trained nurses are on site round the clock. You are looking at £800 to £1,400 per week in most areas, with London and the South East charging considerably more.

Home Care Comes With Its Own Price Tag

Live-in care keeps your relative at home but costs £800 to £1,600 per week depending on the level of dementia care needed. Home care visits cost £15 to £30 per hour, and most people with dementia need multiple visits each day. Do the maths and a full care package often costs as much as residential care.

Who Pays For What?

NHS Continuing Healthcare Covers Full Costs

If your relative has severe health needs, NHS Continuing Healthcare pays for everything. A team assesses physical, mental, and medical needs against strict criteria. Less than 20% of people with dementia qualify, but it is worth pushing for if your relative needs constant nursing care. The NHS covers all care home fees, nursing costs, and personal care when you get approved.

Council Funding Means Passing The Means Test

Your local authority helps with care costs if savings and assets fall below £23,250 in England. The council looks at everything your relative owns except their home if a spouse still lives there. Between £14,250 and £23,250 in assets means partial help with a sliding scale of contributions. Below £14,250 and the council pays most costs, though your relative contributes nearly all their income except a personal allowance of around £28 per week.

Self-Funding Means You Pay The Lot

Assets over £23,250 mean you are a self-funder. You pay all care costs from savings, investments, pensions, and property until assets drop below the threshold. Many families watch a lifetime of savings disappear in months. Self-funders often pay more than council-funded residents in the same care home because providers charge higher fees to private payers.

Getting A Financial Assessment

Contact Adult Social Services Fast

Ring your local council and request a needs assessment and financial assessment. They look at care needs first, then work out what your relative can afford to pay. The process takes weeks or months, so start early before a crisis forces rushed decisions. Get everything in writing and chase them if they go quiet.

Gather Every Financial Document

You need bank statements for the past 12 months, proof of all income including pensions, details of savings and investments, and property valuations. The council wants to see everything your relative owns. They check for deliberate deprivation of assets too, so any gifts or transfers in recent years get questioned. Missing documents slow everything down when time is tight.

Challenge The Decision If It Feels Wrong

Councils make mistakes and assessments can be unfair. You have the right to ask for a review if the financial assessment seems incorrect or if needs were underestimated. Get advice from organisations like Age UK before accepting a decision that does not feel right. Fighting back can save thousands of pounds a year.

Ways To Pay For Care

Using Savings And Income First

Most people start by using pension income and savings to pay care fees. Building societies and banks offer specific accounts for paying care home fees with better access to funds. Set up direct debits to avoid missed payments that cause problems with care homes. Track every penny because care costs drain accounts faster than you expect.

Deferred Payment Agreements Buy Time

The council can loan you money to pay care fees if your relative owns property but has little cash. They put a legal charge on the house and get repaid when it sells. Interest adds up at commercial rates, and the council takes fees for setting up the arrangement. This stops forced house sales in the early days but the debt grows while your relative is in care.

Equity Release Looks Tempting But Costs More

Taking equity from the family home releases cash to pay for care without selling up. Lifetime mortgages and home reversion schemes let you access property wealth while your relative still owns the house. High interest rates and setup costs make this expensive, and the debt eats into inheritance fast. Get proper financial advice before signing anything because these deals are hard to reverse.

Top-Up Fees Fill The Gap

Councils pay a set rate for care that many homes say is not enough. Families often pay top-up fees to get their relative into a better home or keep them somewhere they have settled. You sign a legal contract to pay the difference between council funding and actual fees. These payments can run for years and create ongoing financial pressure that builds resentment over time.

Benefits And Financial Support

Attendance Allowance Adds £100 Per Week

People over State Pension age who need care get Attendance Allowance at £68.10 or £101.75 per week depending on need level. Your relative can claim even if nobody actually provides care. The money is not means tested so savings and property do not matter. This benefit continues in a care home unless the council or NHS pays the full fees.

Pension Credit Tops Up Low Income

Pension Credit adds money to weekly income if your relative is over State Pension age and on a low income. Guarantee Credit brings income up to £201.05 for single people or £306.85 for couples. Savings Credit gives extra money to people who saved some money for retirement. Many older people miss out because they do not know they can claim.

Council Tax Reduction Cuts Bills

Severe mental impairment means no council tax on the family home while your relative still lives there. Get a doctor to certify the diagnosis and apply to the council for exemption. In care homes, the property might qualify for a discount or exemption if it stands empty. Every saving helps when care costs pile up month after month.

Protecting Assets And Planning Ahead

Giving Away Assets Backfires

Transferring property or money to avoid care fees counts as deliberate deprivation. Councils look back years and can still count gifted assets when working out what your relative can pay. They treat you as still owning what you gave away. Courts have ruled against families who thought they were being clever, leaving them liable for care costs anyway.

Trusts Need Expert Legal Advice

Some families put assets into trust to protect them from care costs. This only works if done years before needing care and with proper legal structures. Get it wrong and you create tax problems, lose access to money when you need it, or find the council ignores the arrangement. Specialist solicitors charge thousands to set these up, and there are no guarantees they work.

Insurance Policies Rarely Pay Out

Long-term care insurance sounds good but policies are expensive and full of exclusions. Pre-existing conditions often mean you cannot get cover once dementia symptoms appear. Premiums rise over time and many policies pay less than expected when you claim. Few financial advisers recommend these products anymore because they offer poor value for most families.

Joint Ownership Needs Careful Thought

Adding children to property deeds seems like a way to protect the home. This creates tax liabilities, affects your own mortgage options, and can cause family disputes if relationships break down. The council can still count your parent's share of the property value in financial assessments. Legal advice costs money but saves expensive mistakes that cannot be undone.

Getting Professional Money Advice

Independent Financial Advisers Know The Rules

Find an IFA who specialises in later life planning and care fees. They understand the complex rules around means testing, property, and benefits. Good advisers cost money but save thousands by finding legitimate ways to reduce care costs. Check they are regulated by the Financial Conduct Authority before handing over documents or money.

Solicitors Handle Legal Protection

You need legal advice about Lasting Power of Attorney to manage your relative's money. Solicitors who specialise in elderly client work understand deprivation of assets rules and can advise on property ownership. Free legal advice from charities helps if you cannot afford solicitor fees. Get documents sorted before your relative loses capacity because options narrow fast after that.

Free Money Guidance Exists

MoneyHelper offers free guidance on paying for care and understanding your options. Citizens Advice provides face to face help with benefits claims and challenging council decisions. Age UK advisers know the system inside out and can check you are getting everything available. Use free services first before paying for expensive advice you might not need.

Looking After Yourself Through The Money Stress

The Guilt About Money Is Normal

You feel guilty about counting costs when your parent needs care. Worrying about inheritance while your mum or dad declines feels selfish. Everyone caring for someone with dementia has these thoughts. The money anxiety is real because care costs can destroy financial security you worked decades to build. Talking about these feelings with other carers helps you see you are not alone.

Plan For Your Own Future Too

Watching care costs drain your parent's savings should make you think about your own later years. Start planning now while you are still earning and healthy. You need to protect your own family from the same financial devastation. Get your own Lasting Power of Attorney sorted, review your pensions, and think about long-term care before you need it.

Accept That Hard Choices Come

You cannot always afford the perfect solution. Sometimes the care home you can afford is not the one you wanted. The money runs out and options narrow. Making peace with doing your best within financial limits is part of caring for someone with dementia. Bankrupting yourself to fund marginally better care helps nobody in the long run.

Questions To Ask Right Now

What Assets Need Checking?

List everything your relative owns including bank accounts, savings, investments, pensions, property, and valuables. You need the complete picture to understand what money is available and when means-tested help might start. Missing accounts or assets cause problems later when councils investigate. Get this done before memory problems make your relative unable to remember what they own.

Who Has Legal Authority Over Money?

Check if Lasting Power of Attorney for property and finances exists. Without this you cannot access bank accounts or sell property when your relative loses capacity. Getting LPA sorted takes months and costs around £200 even if you do it yourself. Solicitors charge more but handle everything and make sure you get it right.

What Benefits Are Being Claimed?

Run through every benefit your relative might qualify for and check they are claiming everything. Attendance Allowance, Pension Credit, Housing Benefit, and Council Tax Reduction can add hundreds per month. Use benefits calculators to check nothing is missed. Backdated claims only go back three months so act fast when you find unclaimed benefits.

When Should You Ask For A Needs Assessment?

Contact adult social services as soon as care needs increase beyond what family can manage. Waiting until crisis point means rushed decisions and limited choices. The assessment process is slow so start early even if you think you can cope for now. Getting your relative on the council's radar opens doors to advice and support you did not know existed.