Care Home Fee Benchmarking: Are You Charging Enough in 2026?
UK care home fees vary by over £35,000 a year for broadly the same category of care, depending on region. If you haven’t benchmarked your own fees against current data recently, there’s a real chance you’re leaving revenue on the table — or pricing yourself out of your local market without realising it.
UK care home fees vary enormously by region — from around £897 a week for residential care in the North East to £1,579 a week for nursing care in the South East. Fee benchmarking — checking your own rates against live regional and national data, not just against the home down the road — is the only reliable way to know whether your pricing actually reflects your costs, your rating, and your market, rather than habit.
Why Fee Benchmarking Matters More Than Ever Right Now
Provider costs have risen sharply over the past 18 months, and most of it hasn’t been optional:
- Employer National Insurance rose from 13.8% to 15% from April 2025 — an estimated extra £940 million a year across the care sector
- The National Living Wage rises again to £12.71/hour from April 2026, up from £12.21 — a 4.1% increase, on top of previous years’ rises
- Combined, provider operating costs are estimated to have risen by around 9% during 2025/26, and self-funder fees nationally rose by roughly 10% in the year to December 2025 as providers passed some of that through
If your fees haven’t moved in line with these pressures, the question isn’t really “should I raise my fees” — it’s whether you’ve actually benchmarked, with real regional data, what “in line” even looks like for a service like yours.
The Self-Funder / Local-Authority Fee Gap
One of the most important dynamics in care home fee-setting is the gap between what local authorities pay and what self-funders pay for broadly equivalent care. Nationally, this gap runs to roughly 30% for residential care and 20% for nursing care — self-funders paying meaningfully more than council-funded placements for the same category of care.
This isn’t an accident or an overcharge — it reflects the reality that LA rates are typically negotiated in bulk and often don’t cover the full cost of quality provision on their own, meaning self-funder fees effectively cross-subsidise LA placements within the same home. If your service takes a significant proportion of LA-funded residents, understanding this gap is essential to knowing whether your overall fee mix is actually financially sustainable — not just whether any single fee looks “average.”
UK Care Home Weekly Fees by Region (2026)
These are indicative self-funder averages, aligned with LaingBuisson’s Care Homes for Older People UK Market Report — the industry-standard reference for care sector fee benchmarking.
| Region | Residential | Nursing | Dementia |
|---|---|---|---|
| South East | £1,312 | £1,579 | £1,502 |
| London | £1,289 | £1,543 | £1,478 |
| Scotland | £1,539 | £1,646 | £1,603 |
| South West | £1,145 | £1,389 | £1,312 |
| Wales | £1,156 | £1,394 | £1,217 |
| East of England | £1,134 | £1,367 | £1,298 |
| West Midlands | £1,056 | £1,278 | £1,212 |
| East Midlands | £1,023 | £1,245 | £1,178 |
| North West | £1,012 | £1,234 | £1,167 |
| Yorkshire & Humber | £978 | £1,189 | £1,123 |
| North East | £897 | £1,098 | £1,034 |
| National average | £1,128 | £1,372 | £1,295 |
Scotland and the South East consistently sit well above the national average; the North East consistently sits well below it — a difference worth understanding whether you’re setting fees for the first time or benchmarking existing ones.
What Actually Justifies Charging Above Average
A fee above your regional average is entirely defensible — but only if something specific backs it up.
✓ Justifies a premium
A Good or Outstanding CQC rating where local competitors are Requires Improvement; genuine clinical specialism in short local supply; single en-suite rooms and above-norm staffing ratios; verified low staff turnover and low agency use.
✗ Doesn’t justify a premium
Assuming your costs are higher than everyone else’s without checking; matching a competitor’s fee without verifying their rating, facilities, or specialism are actually comparable to yours.
Free Fee Benchmarking Tool
CQCLogic’s free fee benchmarking tool compares your current weekly fee against live regional and national averages for your care type and funding basis, shows the self-funder/LA differential for context, and — if you enter your occupied bed count — estimates the annual revenue impact of moving to the regional average. Benchmark your fees free.
Summary: What a Proper Fee Benchmarking Review Must Cover
- Your current fee compared against the live regional average for your care type, not a national headline figure
- Your self-funder and LA rates checked separately, given the 20 to 30 percent typical gap between them
- A specific, evidenced reason for any fee set above your regional average
- Recent cost pressures (National Insurance, National Living Wage) reflected in the review, not absorbed silently
- A comparison against local competitors’ rating and specialism, not just their headline price
- A defined review cadence — at minimum annually, and after any material cost or market change
Frequently Asked Questions
How much do UK care home fees cost on average in 2026?
The national average is around £1,128 a week for residential care, £1,372 for nursing care, and £1,295 for residential dementia care, though regional variation is substantial — from under £900 a week in the North East to over £1,500 in London, the South East, and Scotland.
Why do self-funders pay more than local authorities for the same care?
Local authorities negotiate bulk placement rates that often don’t cover the full cost of quality provision alone. Self-funder fees typically run 20 to 30 percent higher and effectively help cross-subsidise LA-funded placements within the same home.
Why are care home fees rising so much in 2026?
Provider costs have risen sharply due to the employer National Insurance increase (13.8% to 15% from April 2025) and successive National Living Wage rises (to £12.71/hour from April 2026), pushing overall operating costs up an estimated 9% during 2025/26.
How often should I review my care home’s fees?
At minimum annually, and immediately after any material change to your costs (wage rises, National Insurance changes), your CQC rating, or your local market (a competitor closing, opening, or changing rating).
Is it safe to just match my local competitors’ fees?
Only if their CQC rating, facilities, and specialism genuinely match yours. Matching a lower-rated or less-specialised competitor’s fee can mean under-charging for what you actually provide, and copying a higher-rated competitor’s fee without the evidence to justify it can price you out of your local market.