28/05/2026

Self-Funding vs Local Authority Funding Explained

Understanding how care is paid for is one of the first, and often most daunting, steps families face when considering a care home. You may have heard terms like ‘self-funder’ or ‘local authority funding’ and wondered what they mean for you and your loved one.

At Mulberry Care Homes, we believe that navigating care funding should never feel overwhelming. This guide explains the key differences between self-funding and local authority funding in clear, straightforward terms, so you can make an informed decision with confidence.

What is self-funding?

A self-funder is someone who pays for their own care privately, without financial assistance from the local council. In England, you are classed as a self-funder if the total value of your savings, investments and assets, including property in most cases, exceeds £23,250.

As a self-funder, you have a great deal of choice. You can select any care home that meets your needs, arrange your care on your own terms, and move at a pace that feels right for your family. Many families value this flexibility. It means they can prioritise the things that matter most: the quality of care, the warmth of the environment, and the location.

It is worth knowing that self-funders are still entitled to a free needs assessment from their local council. This assessment can be a helpful starting point to give a clear, independent picture of the level of care required.

What is local authority funding?

Local authority funding, sometimes called council-funded care, is financial support from your local council towards the cost of a care home placement. To be eligible, you will need to go through two assessments: a care needs assessment and a financial assessment (also known as a means test).

The financial assessment looks at your income, savings, investments, and, in many cases, the value of your property.

The capital thresholds in England

If your capital is above £23,250, you are classed as a self-funder. You will be expected to pay the full cost of your care.
If your capital falls between £14,250 and £23,250, you will receive partial funding from the council. You will also contribute from your income, alongside a ‘tariff income’ calculated from your capital.
If your capital is below £14,250, it is disregarded entirely, though you will still be expected to contribute from your weekly income.

It is important to note that the value of your home may be disregarded if your spouse, partner, or a dependent relative still lives there. Every situation is different, so a financial assessment is always worthwhile.

Key differences between self-funding and local authority funding

Choice of care home

Self-funders can choose any care home that suits their needs and preferences. If you are receiving local authority funding, your council may offer a selection of homes that accept the local authority rate. If you prefer a home with higher fees, a third party may be able to pay a ‘top-up’ to cover the difference.

Cost

As a self-funder, you pay the full weekly fee, which is agreed directly with the care home. With local authority funding, the council contributes towards your fees based on the outcome of your financial assessment. You may still need to make a personal contribution depending on your income.

Speed of placement

Self-funders can often arrange a placement relatively quickly once they have chosen a home. The local authority assessment process can take several weeks, which may affect timing, particularly if an urgent placement is needed.

Financial reassessment

If you are self-funding, there is no regular financial review unless your funds decrease below £23,250. If you receive local authority funding, your finances are reviewed periodically to ensure your contribution remains accurate.

Flexibility

Self-funders have full flexibility over their care arrangements and any changes they wish to make. With council-funded care, changes may need to be discussed and agreed with your local authority.

What happens if your savings fall below £23,250?

If you are currently self-funding and your capital drops towards the £23,250 threshold, contact your local council around three months before you expect to reach that figure. The council will reassess your finances, and you may then become eligible for partial or full funding support.

Councils provide funding from the date you contact them, so getting in touch early is essential. You will not be reimbursed retrospectively for any period where your savings had already dropped below the threshold before you made contact.

Benefits you may be entitled to

Regardless of whether you are self-funding or receiving local authority support, there are benefits that may help with care costs. Attendance Allowance is available to people over State Pension age who have a long-term illness or disability. It is not means-tested, which means your savings and income do not affect your eligibility.

If you are below State Pension age, you may be eligible for Personal Independence Payment (PIP) instead. A specialist benefits adviser or your local Citizens Advice Bureau can help you check what you are entitled to.

NHS Continuing Healthcare

In some cases, individuals with complex or ongoing health needs may qualify for NHS Continuing Healthcare (CHC). This is fully funded by the NHS and is separate from local authority funding. Eligibility is based on a detailed assessment of your health needs rather than your financial situation.

If CHC does not apply, you may still be eligible for NHS-funded Nursing Care. This provides a fixed weekly contribution towards the nursing element of your care if you are in a nursing home.

How Mulberry Care Homes can help

At Mulberry Care Homes, we welcome both self-funded residents and those receiving local authority support across our three homes in Huddersfield and Holmfirth: Astley Grange, White Rose House, and Southfield Court.

We understand that funding care is a deeply personal matter, and our team is always on hand to talk you through your options. Whether you are just beginning to explore residential or nursing care, or you need to understand what happens when funding circumstances change, we are here to help.

Our promise is simple: compassionate, person-centred care in a home-from-home environment, regardless of how your care is funded.