Who pays for dementia care in England? In most cases, the person with dementia pays — at least at first. Dementia care is usually classed as social care rather than NHS healthcare, which means it is means-tested: the local council looks at your savings, income and property before deciding whether it will help with the cost. There are three possible routes to funding: paying for it yourself, getting help from the council, or having the NHS pay the full cost through NHS Continuing Healthcare.

That surprises many families. Dementia is a medical condition, yet a diagnosis alone does not make care free. What matters is whether the person's needs are mainly health needs or mainly social care needs — and how much money they have. Here is how the system works, and what to do if the money starts to run out.

Is dementia care free on the NHS?

No — not usually. The NHS funds care that is primarily for health needs, while councils fund social care, such as help with washing, dressing, eating and getting around. Because most dementia care is day-to-day personal care, it normally falls on the social care side, and social care in England is charged for.

There are exceptions. If a person's needs are primarily health needs — for example, complex, intense or unpredictable medical needs — they may qualify for NHS Continuing Healthcare, under which the NHS pays the full cost of care, wherever it is provided. There is also NHS-funded nursing care, a weekly NHS contribution towards the nursing costs of someone in a nursing home. Both are worth asking about, because neither is means-tested: savings and property are irrelevant to them.

The means test: the £23,250 and £14,250 limits

If the NHS is not paying, the local council carries out two assessments. First, a needs assessment, which is free and establishes what care the person needs. Then a financial assessment, often called a means test, which works out how much they must pay towards it. The financial assessment looks at income, savings and property — but only the person's own resources, not a partner's or a child's.

In England, the means test turns on two capital limits:

• More than £23,250 in capital: you pay the full cost of your care yourself. This is called the upper capital limit, and the council does not contribute towards your fees.
• Between £14,250 and £23,250: the council may help, but your capital is treated as if it produces an assumed or "tariff" income — £1 a week for every £250, or part of £250, above £14,250. So capital of £14,750 counts as £2 a week of tariff income.
• Below £14,250: your capital is ignored altogether. You still contribute from your income, but you are allowed to keep a Personal Expenses Allowance of at least £31.80 a week for your own spending.

The capital limits have stayed the same for years: the Department of Health and Social Care's February 2026 circular raised the income thresholds in line with inflation, but the capital limits are unchanged. The figures apply in England; Scotland, Wales and Northern Ireland set their own limits.

It will not work to spend money or give property away before the financial assessment in order to qualify for help. The assessment can look at things you used to own, and if the council thinks you deliberately reduced your wealth to avoid paying for care, it can treat you as though you still have the money.

Does the family home have to be sold?

Not always. If the person needs a paid carer at home, or moves into a care home only for a short stay, the value of their house is not included in the financial assessment. For a permanent care home place, the home normally is counted — unless certain people still live in it, such as a partner, a close relative who is of State Pension age or incapacitated, or a child under 16.

There is also a 12-week disregard: the value of the home is ignored for the first 12 weeks of a permanent care home placement in some circumstances. And a deferred payment scheme can help where savings are below the £23,250 limit but all the money is tied up in the property: the council pays for the care home and the amount is repaid later, when the home is sold or after the person's death. Renting the home out, or releasing equity from it, are other options the NHS points families towards — though equity release means paying interest, and it can be expensive.

NHS Continuing Healthcare: the route families miss

NHS Continuing Healthcare (CHC) is the funding route that changes everything, and it is the one families most often miss. If a person's needs are primarily health needs, the NHS funds the entire package of care — care home fees included — and it is not means-tested, so it does not matter how much money or property the person has.

Dementia does not automatically qualify someone for CHC. The test is the nature, intensity, complexity and unpredictability of their needs, not the diagnosis. If you think the person might qualify, ask the NHS or the council for a CHC assessment. Age UK's guidance also notes that people receiving care after detention in hospital under the Mental Health Act may get free after-care under section 117, with no means test at all.

How much does dementia care cost?

There is no single national price: the cost depends on where you live and how much care is needed, and the NHS notes that serious health problems such as dementia can increase the cost. As a guide, the NHS puts a typical hourly rate for a carer at home at around £20, while a live-in carer costs from around £800 a week and can reach £1,600 a week if a lot of care is needed.

Care home fees vary widely by area and by the level of care. The council only funds care up to its own usual rate for a placement that meets the assessed needs, so if the family chooses a more expensive home, a third party — usually a family member — may need to pay the difference as a "top-up". The person in care cannot usually top up their own fees from their Personal Expenses Allowance.

What to do when savings run low

If savings are heading towards the £23,250 upper limit, contact the council a few months before they reach it — do not wait until the money is gone. The NHS advises contacting the council about three months before savings are expected to drop below the limit and asking for a reassessment, because councils fund from the date you contact them and will not reimburse you for the period before that.

Benefits can help too. Attendance Allowance and Personal Independence Payment (PIP) are not means-tested, and can be used to pay towards care. People over State Pension age may also be entitled to Pension Credit. For free, independent advice, the NHS points families to Age UK on freephone 0800 678 1602, MoneyHelper on 0800 138 7777, and accredited specialist care fees advisers through the Society of Later Life Advisers.

Frequently asked questions

Does having dementia mean care is free? No. A dementia diagnosis alone does not qualify someone for free NHS care. Care is free only if the person qualifies for NHS Continuing Healthcare, or for specific free services such as reablement after a hospital stay.

Will my parent have to sell their house to pay for a care home? Only if the home counts in the means test. It does not count while a partner or certain dependants live there, or for care at home or short stays. A deferred payment scheme can also delay any sale.

What if we disagree with the council's financial assessment? Ask the council to explain how it worked out the figures. You have the right to complain to the council first, and then to the Local Government and Social Care Ombudsman if you are not happy with how the complaint was handled.

Can the council count money my parent gave away? Yes. Giving money or property away to reduce the amount you pay for care is called deliberate deprivation, and the council can treat you as though you still have the assets.

Sources: NHS — Paying for your own social care (self-funding) and Age UK — Factsheet 10, Paying for permanent residential care (April 2026).