What Does Home Care Cost? Understanding the Price and Funding of Domiciliary Care in the UK

Why cost matters

When families begin exploring domiciliary care (also called “home care”), one of the first questions is: how much will it cost? Domiciliary care allows older people and those with disabilities to remain in familiar surroundings while receiving support with personal care, medication, household tasks and companionship. However, paying for care can be confusing because costs vary by provider, location and the level of support required. Recent policy changes and cost‑of‑living pressures have amplified this uncertainty. This article explains the key factors influencing home‑care pricing, how much providers charge, and what funding options exist.

The minimum price of home care

The Homecare Association, which represents many UK home‑care agencies, publishes an annual minimum price for home care to illustrate what it costs to deliver one hour of care while paying staff at the statutory National Living Wage. For April 2025 to March 2026 the Association set the minimum price at £32.14 per hour, up from £28.53 the previous year.  This increase reflects a 6.7 % rise in the National Living Wage and higher employer National Insurance contributions . The Association emphasises that £32.14 is a minimum, not a fair or sustainable price; paying carers a wage comparable to NHS band 3 healthcare assistants would require about £33.87 per hour (£38.32 in outer London) . These figures illustrate why many home‑care providers are raising fees, they need to cover wages, training, insurance, travel costs and overheads while maintaining quality.

Local authorities (councils) commission a large proportion of domiciliary care, yet only 1 % of public contracts pay rates that cover even the Homecare Association’s minimum price.  Many councils still pay around £20–£25 per hour, which is below the cost of delivery.  This underfunding contributes to providers withdrawing from contracts or refusing new packages.  The Association warns of a £1.9 billion funding deficit and notes that without an emergency cash injection and a national contract for care services, some companies may hand back contracts or close altogether .

Self‑funding versus council‑funded care

The UK operates a means‑tested system for social care, which determines whether an individual pays for home care privately (self‑funding) or receives council support.  In England, if you have capital and savings above £23 250 you must usually pay the full cost of your home‑care package. Those with assets between £14250 and £23 250 pay a contribution, while those with less than £14250 may have care fully funded by the council.  In 2021 the Conservative government proposed reforms: from October 2025 the upper capital threshold would rise to £100 000, the lower threshold to £20 000, and a lifetime cap of £86 000 on personal‑care costs would be introduced .  These changes would have meant more people qualifying for means‑tested support and a limit on how much anyone would pay for personal care.  However, the Labour government elected in 2024 scrapped these reforms, leaving the current thresholds and no cap in place .  Families searching online for “care cap 2025” or “£86k care cap” are often unaware that the policy has been cancelled.

In Scotland and Wales, care funding rules differ.  Scotland offers free personal care at home for those aged 65 and over, but individuals may still contribute towards domestic services.  Wales has a maximum weekly charge (around £100). Northern Ireland has yet another system. These differences make it essential to consult your local authority or an independent adviser to understand what financial help is available.

Private versus live‑in care costs

Domiciliary care can be delivered through short visits (e.g., 30 minutes to a couple of hours) or as live‑in care, where a carer stays with the person around the clock. Hourly rates typically range from about £25 to £35 per hour, depending on region and agency reputation.  Weekend and night care may cost more.  Live‑in care is a more intensive service, often used when someone needs support day and night but wants to avoid residential care; costs generally start from £1 000 to £1 600 per week, again influenced by location and the carer’s skills.  The advantage of live‑in care is that one‑to‑one attention often allows people to remain in their own homes and avoid the upheaval of moving to a care home.

Financial planning and benefits

Because the cost of care can be substantial, families should explore whether they or their loved ones are eligible for Attendance Allowance, Carer’s Allowance, Personal Independence Payment (PIP) or Disability Living Allowance.  These benefits can help offset some of the cost of home care.  Even if you are a self‑funding client, you may benefit from a free care needs assessment from your council and financial advice. Specialist financial advisers can help plan for long‑term care costs and may recommend equity release products, care annuities or re‑allocation of investments. It is important to consider the impact of selling property or using savings on inheritance and other financial goals.

The bigger picture

The affordability of home care is not just a personal concern; it is also a systemic issue.  With an ageing population and recruitment challenges in the sector, many providers struggle to recruit enough carers and remain financially viable. Understanding how costs are calculated and why providers set certain fees helps clients recognise that high‑quality care requires adequate funding. By being informed about the current rules and proposed reforms, families can make better decisions and advocate for fairer policies.