You cannot simply refuse to pay care home fees. If your assets exceed £23,250, you are legally expected to self-fund. However, there are seven legitimate ways to reduce what you pay — including NHS Continuing Healthcare, Funded Nursing Care, Attendance Allowance, and deferred payment agreements.
This guide covers England only. Scotland, Wales, and Northern Ireland have different care funding systems.
Last updated: March 2026.
This guide sets out seven approaches that actually work, explains what councils investigate when they suspect someone is trying to avoid fees, and draws a clear line between legitimate planning and the kind of activity that will get your family into serious trouble.
Can You Legally Avoid Care Home Fees?
Let's be direct: if you have savings and property worth more than £23,250, you are expected to pay for your own care. That is the law in England, and no amount of clever manoeuvring changes it.
But here is what most families do not realise: many self-funders pay more than they need to. Not because the system is designed to overcharge you, but because entitlements go unclaimed, fee rates go unchallenged, and financial assessments contain errors that nobody catches.
The average care home in England now costs over £1,000 per week. Over a typical stay, that adds up to tens of thousands of pounds. Even small reductions — a benefit worth £108 per week, a negotiated discount of £100 per week — compound into meaningful sums over months and years.
The question is not "how do I avoid paying?" It is: "am I paying the right amount, and am I claiming everything I am entitled to?"
For most families, the answer is no. Here are seven things to check.
7 Legitimate Ways to Reduce What You Pay
1. Check Eligibility for NHS Continuing Healthcare (CHC)
NHS Continuing Healthcare is the single most valuable entitlement in the care funding system. If your relative qualifies, the NHS pays for their care in full — including the care home fees. There is no means test. It does not matter if they own a mansion and have £500,000 in savings.
CHC is awarded when someone has a "primary health need" — meaning their care needs are mainly health-related rather than social. In practice, this covers people with complex medical conditions, advanced dementia with severe behavioural symptoms, or conditions requiring significant clinical intervention.
The problem is that only 14% of families are aware CHC exists. Those who do apply face a process that can feel deliberately obstructive. Assessment panels vary enormously between regions, and initial rejections are common even for people who clearly qualify.
If your relative has complex health needs, request a CHC Checklist assessment. If the Checklist is positive, push for a full Decision Support Tool assessment. If you are rejected, appeal — the success rate on appeal is surprisingly high.
For families dealing with dementia specifically, the rules around CHC eligibility and dementia are worth understanding in detail.
Potential saving: 100% of care home fees (worth £52,000-£78,000+ per year).
2. Claim NHS-Funded Nursing Care (FNC)
This is the entitlement that the largest number of families miss entirely.
NHS-Funded Nursing Care pays £267.78 per week directly to the nursing home for anyone who lives in a nursing home (as opposed to a residential care home) and has nursing needs assessed by a registered nurse. It is paid by the NHS. It is not means-tested. Even if you are a self-funder with substantial assets, you are entitled to it.
Over a year, FNC is worth more than £13,924. Over a typical care home stay of 2-3 years, that is £35,000 to £42,000 — money that stays in the family rather than being spent on fees.
FNC is separate from CHC. You can receive FNC even if your CHC application was rejected. It applies specifically to the nursing component of care — the involvement of registered nurses in your relative's day-to-day care.
To claim, the nursing home should arrange an assessment. In practice, some homes are better than others at triggering this. If your relative is in a nursing home and you are not sure whether FNC is being claimed, ask the home directly. If it is not in place, request the assessment.
Potential saving: £267.78 per week (£13,924+ per year).
3. Apply for Attendance Allowance
Attendance Allowance is a tax-free, non-means-tested benefit worth up to £114.60 per week (higher rate) or £76.70 per week (lower rate) for people aged 66 and over who need help with personal care.
The critical rule: self-funders can claim and keep Attendance Allowance in full. If the local authority is paying for care, the benefit stops after 28 days — but if you are paying your own fees, it continues for as long as your relative is eligible.
At the higher rate, that is roughly £5,959 per year. Most care home residents would qualify for the higher rate, given the level of support they receive.
Attendance Allowance is one of the most under-claimed benefits in the UK. If your relative is self-funding and not claiming it, apply immediately. The form can be requested by phone and backdated to the date of the request.
Potential saving: up to £114.60 per week (£5,959 per year).
4. Negotiate the Fee Rate
Most families accept the first fee quoted by a care home without questioning it. That quote is typically 30-40% higher than the rate the same home accepts from the local council.
Councils publish what they consider a fair cost of care through Market Sustainability and Improvement Fund (MSIF) data. These benchmark rates represent what local authorities are willing to pay for a care home place. They are lower than private rates — but they give you a starting point for negotiation.
You are not obliged to pay the first figure quoted. Some homes will negotiate, particularly if they have empty beds. Others will not — but you lose nothing by asking.
For a detailed guide on how to approach this conversation, including regional rate comparisons and practical scripts, see our guide to negotiating care home fees.
Potential saving: £100-£400+ per week depending on the gap between quoted and benchmark rates.
5. Request a Deferred Payment Agreement
If your relative's main asset is their home, a Deferred Payment Agreement (DPA) allows the local authority to pay the care home fees while a legal charge is placed on the property. The debt is repaid when the property is eventually sold — usually after the person has died or permanently left care.
This means you do not have to sell the house to fund care. The property can be rented out for income, or simply left until the family is ready to sell.
DPAs come with costs: a setup fee (typically around £450), an interest rate (currently 4.75% APR), and administration charges. But for many families, the ability to defer a forced sale is worth those costs.
To qualify, your relative generally needs to have less than £23,250 in non-property assets. The local authority cannot unreasonably refuse a DPA if your relative meets the criteria.
For the full details on how DPAs work, eligibility rules, and the costs involved, see our guide to deferred payment agreements.
Potential saving: avoids forced property sale, preserving estate value and rental income.
6. Use a Protective Property Trust (Plan Ahead)
A Protective Property Trust (PPT) is a legal arrangement set up through a will. When one spouse dies, their share of the family home is held in trust for the surviving spouse to live in — but it is no longer counted as part of the surviving spouse's assets for care fee purposes.
This is not a loophole. It is a well-established estate planning tool used by solicitors across the country. It protects the deceased spouse's share of the property (typically 50%) from being included in the means test if the surviving spouse later needs care.
The critical point: a PPT must be set up through a will before care is needed. It cannot be created retrospectively. If your parents are in their 60s or 70s and in reasonable health, this is the time to arrange it — not when one of them is about to enter a care home.
A PPT does not protect the surviving spouse's own share of the property, and it does not protect savings or other assets. It is one piece of a broader estate plan, not a complete solution.
Always use a solicitor who is regulated by the Solicitors Regulation Authority. The cost is typically £300-£600 for mirror wills including a PPT.
Potential saving: protects up to 50% of property value from means testing.
7. Get the Financial Assessment Right
When the local authority carries out a financial assessment (means test), they calculate your relative's total capital and income to determine how much they should contribute towards care. Errors in this assessment — in either direction — are more common than most families realise.
Assets that should be excluded from the means test include:
- The value of the home if a spouse, partner, or qualifying relative (aged 60+, under 16, or disabled) still lives there
- Personal possessions such as furniture, clothing, and jewellery
- The surrender value of life insurance policies
- Certain business assets if your relative is a sole trader
Common mistakes that inflate the assessment:
- Counting the property when a qualifying person still lives there
- Including jointly held assets at full value rather than the person's share
- Failing to account for allowable expenses and the Personal Expenses Allowance (£31.82 per week)
- Not deducting mortgage or secured debt from property valuations
If the assessment looks wrong, challenge it. Request a written breakdown of how the council calculated the contribution. If you believe there is an error, you have the right to ask for a reassessment.
The 2026 means test thresholds and rules are important to understand before going into this process.
Potential saving: varies, but correcting assessment errors can reduce contributions by thousands per year.
Worked Scenario: Stacking Legal Reductions
To see how these legitimate strategies work together, let's look at a realistic example:
John's Situation (Self-Funding in a Nursing Home):
- Initial Quote: £1,600 per week (£83,200/year).
- Strategy 1 (FNC): John requires nursing care. The family ensures the home applies for NHS-Funded Nursing Care. This reduces the self-funded portion of the fee by £267.78/week.
- Strategy 2 (Attendance Allowance): The family applies for the higher rate of Attendance Allowance. John receives £114.60/week tax-free, which goes straight towards his fees.
- Strategy 3 (MSIF Negotiation): Using RightCareHome's MSIF data, the family discovers the local council only pays this specific home £1,150/week. Armed with this data, they negotiate the base private fee down from £1,600 to £1,450/week.
The Financial Result:
- Negotiated base fee: £1,450
- Minus FNC: -£267.78
- Effective fee to pay: £1,182.22
- Offset by Attendance Allowance: -£114.60
- Final out-of-pocket cost: £1,067.62 per week
By claiming legal entitlements and negotiating with data, John's family reduced his actual weekly cash drain from £1,600 to £1,067.62—a saving of £27,683 per year, completely legally.
What Happens If You Give Away Assets to Avoid Care Home Fees?
This section matters. If you take away one thing from this article, let it be this: deliberately giving away money or property to reduce your capital below the means test threshold is the single biggest mistake families make.
It is called "deprivation of assets," and local authorities actively investigate it.
How It Works
If the council believes that your relative disposed of assets — gave away money, transferred property, sold something at an undervalue — with the deliberate intention of reducing their capital to avoid care home fees, they can treat your relative as still owning those assets. This is called "notional capital."
In practice, this means the council assesses your relative as if the money or property is still there. The care fees are calculated on that basis. Your relative is expected to pay the full amount — even though the assets are gone.
The 7-Year Myth
There is a widespread belief that if you give assets away more than 7 years before needing care, the council cannot investigate. This is completely wrong.
The 7-year rule applies to inheritance tax. It has nothing to do with care home fee assessments. There is no time limit on how far back a local authority can look when investigating deprivation of assets. A gift made 10 or 15 years ago can still be challenged if the council believes it was motivated by avoiding care fees.
The test is not when the gift was made. The test is why it was made. If care was foreseeable at the time — if the person was already showing signs of declining health — the timing works against you regardless of how long ago it happened.
What Councils Actually Check
Local authorities look for patterns:
- Large gifts or transfers made after a health diagnosis
- Property transferred to family members while the person continues to live there
- Savings moved into other people's accounts
- Assets sold significantly below market value
- Trusts created shortly before or after care needs became apparent
If a deprivation of assets finding is made, the council can also pursue the person who received the assets. This means your children, grandchildren, or other family members could be asked to contribute towards the care fees.
We cover deprivation of assets in detail in a separate guide, including the specific tests councils apply and how to respond if you are investigated.
The Bottom Line
Do not give away assets to avoid care fees. It does not work, it creates legal problems for your family, and it can make the entire situation significantly worse.
What About Trusts, Property Transfers, and "Schemes"?
A brief word on the industry that has grown up around care fee avoidance.
Trusts
Trusts can be a legitimate part of estate planning. A Protective Property Trust (as described above) is one example. Discretionary trusts set up years before care is needed, for genuine reasons unrelated to care fees, may also be effective.
However, a trust created specifically to shield assets from care fees — particularly one set up after a diagnosis or when care is foreseeable — will almost certainly be challenged. The local authority has the power to treat trust assets as belonging to the person if the purpose was to avoid fees.
Property Transfers
Transferring your home to your children while you continue to live in it is one of the most common "strategies" promoted online. It is also one of the most likely to fail.
If you give away your home but continue to benefit from it (by living in it), this is treated as a "gift with reservation of benefit" for tax purposes — and as a deprivation of assets for care fee purposes. The council will treat you as still owning the property.
Unregulated Advisors
Be extremely cautious of anyone who charges you £2,000-£5,000+ for a "care fee planning package" that promises to protect your assets. Some of these advisors are not regulated by the Financial Conduct Authority or the Solicitors Regulation Authority. Their advice may not be worth the paper it is written on — and if it turns out to be wrong, you have no recourse.
If you want estate planning advice, use a solicitor who is regulated by the SRA. If you want financial advice about care funding, use an advisor who is authorised and regulated by the FCA and specialises in later-life planning. Ask for their registration number and verify it before paying anything.
Your Next Step: Find Out What You Are Entitled To
If you have read this far, you already know more about care home fee reduction than most families. The next step is to work out which of these seven approaches applies to your specific situation.
Start with the basics:
- Is your relative in a nursing home? Check whether NHS-Funded Nursing Care (£267.78/week) is being claimed. If not, request the assessment today.
- Is your relative self-funding? Apply for Attendance Allowance if they are not already receiving it. The higher rate alone is worth £5,959 per year.
- Does your relative have complex health needs? Request a CHC Checklist assessment. If rejected, consider an appeal.
- Has the financial assessment been done correctly? Request a written breakdown and check it against the current means test rules.
- Are you paying the quoted rate without questioning it? Understand what councils pay and use that as a benchmark.
For a complete overview of your funding options — including the thresholds, entitlements, and the step-by-step process for claiming each one — see our care home funding eligibility guide. If you are worried about savings running out, our guide on what happens when care home money runs out explains the council safety net and top-up fees.
Every week you delay claiming an entitlement is money lost. The benefits described in this guide are not backdated indefinitely. Start with the quickest wins — FNC and Attendance Allowance — and work through the rest methodically.
Get Your Free Custom Funding Action Plan
Fee Reduction Checklist: Route by Route
| Funding route | Action | Potential saving/week | Where to apply |
|---|---|---|---|
| NHS Continuing Healthcare | Request CHC Checklist from ICB | 100% of fees | Local Integrated Care Board |
| NHS-Funded Nursing Care | Confirm FNC is applied at the nursing home | £267.78 | Nursing home / ICB |
| Attendance Allowance | Apply if self-funding and aged 66+ | Up to £114.60 | GOV.UK / DWP |
| MSIF fee negotiation | Use council benchmark rates to negotiate | £100-£400 | Direct with care home |
| Deferred Payment Agreement | Apply if property-rich but cash-poor | Avoids forced sale | Local authority |
Sources
- NHS — NHS Continuing Healthcare
- NHS — NHS-Funded Nursing Care
- GOV.UK — Attendance Allowance
- GOV.UK — Market Sustainability and Improvement Fund
- UK Parliament — Care Act 2014, Section 34 (Deferred Payment Agreements)
- GOV.UK — Care and Support Statutory Guidance