A dementia diagnosis brings enough to think about without also having to decode the UK’s care funding system.
Sorting out care home funding for dementia patients soon turns into one of the hardest parts of the journey for almost all families, because, unlike NHS hospital treatment, social care in the country is not automatically free.
However, whether your loved one requires a couple of hours of home care a week or 24-hour residential dementia care, the cost depends on where in the UK you live, how much you have in savings and assets, and whether their needs are judged to be essentially health-related or social.
Certain individuals receive complete NHS funding, while others are subject to a contribution according to a means test, and some have to pay for everything themselves.
The guide explains all the funding options in simple terms, from care home fees and costs of care at home to the local authority means test, NHS Continuing Healthcare, and relevant benefits, so you know where to get started.
Key Takeaways
Dementia care funding depends on a needs assessment and, in most cases, a financial (means) test.
In England, you will have to self-fund dementia care if your capital is above £23,250; however, if your capital is below £14,250 or between £14,250 and £23,250, you are eligible for local authority funding.
NHS Continuing Healthcare (CHC) pays 100% of care costs if your needs are primarily health-related, regardless of your savings.
Attendance Allowance, Pension Credit and Carer’s Allowance are all non-means-tested benefits worth checking, even if you are self-funding.
Use ComparedExperts to find the top live-in care providers, which will guide you through dementia care funding.
How Much Does Dementia Care Cost In The UK?
Dementia care is generally pricier than standard elder care, as it often requires higher staff-to-client ratios, more specialised training, and, in later stages, round-the-clock secure or nursing-level support.
Average Care Home Fees
Costs vary significantly by region and the type of care needed:
| Care Type | Average Weekly Cost | Average Annual Cost |
|---|---|---|
|
General Residential Care Home |
£1,298 |
£67,496 |
|
Residential Dementia Care Home |
£1,343 |
£69,836 |
|
General Nursing Home |
£1,535 |
£79,820 |
|
Dementia Nursing Home |
£1,564 |
£81,328 |
Average Care Home Fees
| Home Care Type | Average Cost |
|---|---|
|
Hourly Domiciliary Care |
£30 to £34 per hour |
|
Daily Visits (4*30mins) |
£70 to £100 per day |
|
£1,000 to £2,000 per week |
|
Note: These numbers are only approximations and will differ by provider and region.
Why Does Dementia Care Often Cost More?
Dementia frequently requires one-to-one supervision, secure environments to prevent wandering, and specialist staff trained to manage behavioural symptoms, all of which push costs above standard elderly care rates.
Want to learn more about the cost of dementia care? Read our guide.
Who Pays For Dementia Care? Understanding the Funding Routes
There are four main routes through which dementia care in the UK is funded. Most people end up using a combination of these over time.
Self-Funding
If your capital exceeds the higher threshold limit in your country, then you are responsible for the full cost of your care until your assets fall below that limit.
Local Authority Funding
If you pass a needs assessment and a financial assessment (in which your assets and savings are taken into account), your council contributes toward the cost either partially or fully, depending on your means.
Want to learn more about local authority funding? In our guide, we talked in detail about local authority funding and other funding options.
NHS Continuing Healthcare (CHC) Dementia Care Funding
When a person’s primary need is health-related rather than social, the NHS can fund the entire cost of home or residential care without any means test.
NHS-Funded Nursing Care (FNC)
If you live in a nursing home and do not qualify for full CHC, the NHS offers NHS-Funded Nursing Care (FNC), a standard weekly payment directly to the nursing home to help cover registered nurse care costs. The weekly rate of FNC is set at £267.68 as of 1st April 2026.
The Care Needs Assessment: Your First Step
Once a needs assessment has confirmed your need for support, the council then conducts an assessment of your finances, which is referred to as a ‘means test’, to determine how much (if any) money it will pay toward the cost of your care.
How To Request An Assessment?
Contact your local council’s adult social care team directly, or ask a GP, memory clinic or hospital discharge team to make a referral on your behalf. Anyone can request an assessment; you don’t need to wait for a crisis.
The Financial Assessment (Means Test) Explained
If the needs assessment indicates that some form of care is needed, the council will carry out a financial assessment (means test) to work out how much funding you will get.
Capital Thresholds England
| Capital Level | What It Means |
|---|---|
|
Above £23,250 |
You are a self-funder and pay the full cost of care. |
|
Between £14,250 and £23,250 |
You contribute from your income, plus £1 per week for every £250 of capital between the limits. |
|
Below £14,250 (lower capital limit) |
Your capital is ignored; you pay only what you can afford from income. |
How Is Your Home Treated?
Your property is usually included in the means test once you move into a care home permanently, but there are important exceptions.
The value of your home is fully disregarded if your spouse, a relative aged 60+, or a dependent child still lives in all or part of your home.
There is a 12-week property disregard from the date you move into a care home permanently, giving families breathing space before the home is counted as an asset in the financial assessment.
What Counts As Capital and Income?
Capital includes savings, investments, shares and property (if applicable). Income includes the state pension, private pensions, and all other benefits, though some disability benefits may be disregarded.
NHS Continuing Healthcare (CHC) For Dementia: Do You Qualify?
Of all the funding options for people with advanced dementia, NHS Continuing Healthcare is arguably the most valuable and the most overlooked.
Initially, previous funding was available only for those with low savings and income levels, but the NHS covers 100% of care costs, including accommodations, regardless of savings or income.
Full Assessment and CHC Checklist
It begins with a CHC checklist, most often filled out by a nurse, social worker or hospital discharge team.
If it suggests possible eligibility, a comprehensive multidisciplinary assessment then looks at a person’s needs across all domains: behaviour, cognition, mobility, communication and continence.
Why Are Dementia Patients Often Wrongly Denied CHC?
Sometimes dementia is treated only as a social care need, even when the behaviour and psychological symptoms are sufficiently complex and unpredictable enough to meet the health-need threshold.
There are concerns that assessments undervalue both the risk of night-time, challenging behaviour and the unpredictability that defines advanced dementia.
How To Appeal A CHC Funding Decision?
If CHC refuses, you can request a formal review through the local Integrated Care Board (ICB) and escalate to an independent review panel if needed.
Organisations such as Dementia UK and Age UK assist families in preparing an appeal; it is also worth requesting a full copy of the evaluation paperwork to ensure it reflects your day-to-day needs.
Benefits and Financial Support You May Be Entitled To
Here are several benefits that can help with dementia care costs:
| Benefit | 2026/27 Rate | Means-Tested | Who It Is For |
|---|---|---|---|
|
£76.70 to £114.60 per week |
No |
Anyone above the state pension age who needs help with personal care. |
|
|
Top income up to a guaranteed minimum |
Yes |
Pensioners on a low income |
|
|
£86.45 per week |
No |
Unpaid carers providing 35+ hours of care a week |
|
|
Varies by council |
No |
People with dementia and their carers |
|
Attendance Allowance, in particular, is worth checking even for self-funders, since eligibility is based purely on care need rather than income or savings.
Options If You Are Struggling To Pay For Dementia Care
Here are some options available:
- Deferred Payment Agreement (DPA): The council covers your fees upfront and reclaims the cost later, normally from your estate, so you are not forced to sell your home immediately.
- Equity Release: It allows you to receive cash from your property while you remain the owner, but it results in a lower inheritance and incurs long-term costs.
- Care Fee Payment Plans (immediate needs annuities): A one-off payment in exchange for a guaranteed income to cover care fees for a lifetime.
- Top-Up Fees: If a care home costs more than your council will pay, a third-party (usually a family member) can pay the difference.
Before committing to any of these, it is wise to have a local authority financial assessment or to speak with a professional financial advisor.
How To Get Help Applying For Dementia Care Funding?
There is no need to go through this alone. Here are some organisations that offer free expert advice:
- Your local authority’s adult social care team, for needs and financial assessments.
- Age UK: For general advice on funding care and benefits checks.
- Dementia UK’s Admiral Nurses: Dementia-specific support, including assistance with CHC.
- Alzheimer’s Society: Practical legal and financial help.
- A financial adviser accredited by the Society of Later Life Advisers (SOLLA) for specialist advice on care fee planning.
- ComparedExperts: You can use ComparedExperts to compare the top live-in care providers and choose the one that matches your needs.
Find The Top Live-In Care Providers With ComparedExperts
Once you understand how dementia care is funded, the next step is finding a provider you can trust. ComparedExperts makes it easy to compare live-in care providers across the UK side-by-side, covering costs, care specialisms, availability, and reviews.
ComparedExperts enables you to easily and quickly compare all your options for live-in care and dementia care homes in residential settings, helping you save time and reduce hassle during what is already a highly stressful period.
Fill in our quick quote form, and we will connect you with the top live-in care providers that best match your needs.
FAQs
The NHS can fund dementia care in full through NHS Continuing Healthcare if needs are assessed as primarily health-related, regardless of savings.
Not necessarily straight away. Your home is disregarded from the means test if a spouse or qualifying relative still lives there. A Deferred Payment Agreement (DPA) can also delay a sale.
NHS Continuing Healthcare is fully NHS-funded, not means-tested, and only awarded when health needs are primary. Whereas local authority funding is means-tested.
There is no fixed timescale, but councils are expected to complete assessments within a reasonable time, often a few weeks. Urgent cases are usually prioritised.
You can request a formal review by the local Integrated Care Board and can even take it to a review panel.
