Care costs cap axed: how can you bring costs down?

Social care reforms, including a cap on the maximum amount you would spend on personal care in your lifetime, have officially been scrapped after years of delays.

Chancellor Rachel Reeves announced the reforms would be dropped on 29 July 2024, in a bid to cover shortfalls in government revenue.

The plans, first set out in September 2021, were due to come into effect in October 2023, but in October 2022 they were delayed to October 2025 - and have now been cancelled altogether.

Here, Which? sets out what paying for social care will look like without the reforms, and what you can do to keep costs down.

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What were the planned reforms to social care?

The reforms set out changes to the funding of later life care in England only, as social care is a matter devolved to each nation’s government.

A major feature of the reforms was introducing a cap on the overall amount any individual would spend on personal care in their lifetime at £86,000. Personal care includes support with eating or dressing, as well as medical assistance. You would have still needed to pay for living costs like food, accommodation, or energy bills.

The cap would have most benefitted those who had savings far beyond the threshold for council funding, and likely wouldn't have been able to reach the threshold to qualify for support in their lifetime.

This threshold called the ‘upper capital limit’ is the maximum amount of savings (including the value of your house) you could have and receive funding support from your local council. The plan was to raise it in England from £23,250 to £100,000. 

There’s also a ‘lower capital limit’, and if you have less than this in savings (including the value of your home), the council will pay for your care. There were plans to increase the lower capital limit from £14,250 to £20,000.

When the plans were first announced in 2021, the Local Government Association raised concerns about the level of funding available to bring about the reforms. It was expected that local councils would fund the remainder of care costs, but there was no accompanying increase in funding.

All of these plans have now been dropped, so there will be no lifetime cap and the capital limits remain the same.

• Find out more: Autumn Budget 2024: when is it and what will it contain? 

When will the council cover your care costs?

The council steps in to pay towards your care if the total value of your assets falls below the upper capital limit. You’ll generally still need to contribute to care costs from your income - if you have a pension, for example - and the council will pay for the rest.

If you have less money than the upper limit, but more than the lower limit, you’ll also pay a ‘tariff income’, which is £1 a week for every £250 you have in savings between the two limits.

These limits vary by country, with England and Northern Ireland having the lowest limits.

If you live in Scotland, you’ll have access to free personal care - that’s any costs associated with something with which you’d need a carer’s help - regardless of your financial situation. This doesn’t include additional living costs like food or accommodation.

• Find out more: care home fees 

Do you have to sell your house to pay for care?

If you're receiving care at home, your house will not be considered as part of your assets in the funding assessment. If you want to unlock some of the value of the home to pay for care while you still live there, you could benefit from equity release - but if you move out to a care home, you'd then need to sell your home to pay back the equity release loan.

If you move into a care home, your home’s value still won’t be counted if your carer or another close relative, like a spouse or a child, over the age of 60 still lives there. 

Otherwise, you’ll have 12 weeks after beginning a long-term stay in a care home before the council considers the value of your home as part of your overall assets. 

You can set up a 'deferred payment agreement' with the council if you don’t want to sell your home immediately, or if you're struggling to find a buyer. With this arrangement, the local authority will pay for care costs and you’ll repay them with interest when you eventually sell your home.

Is equity release right for you?

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How can you reduce the cost of care?

If you don't qualify for funding from your local council, there are other sources of support to help with paying for later life care.

Support from the NHS

NHS Continuing Healthcare (CHC) is available for those who score highest on an assessment of the intensity and complexity of their needs and therefore require the most intensive care. Most people who apply for this funding will be rejected as it’s for the most extreme needs, but this type of funding is based on medical need rather than financial situation.

NHS Funded Nursing Care (FNC) is also available to those in a nursing care home with significant caring needs. You could receive one of two flat rates at £235.88 per week, or £324.50 per week – which will cover the additional costs of nursing care but not the accommodation aspect of care fees.

Claim attendance allowance benefit

Attendance allowance is a benefit for those over state pension age who have a physical or mental disability which means they need someone to care for them, although you don’t have to have a carer to claim. There are two different rates of attendance allowance (depending on the level of need): £72.65 and £108.55 a week.

Visit different care homes

If you're looking for a care home for a loved one, you'll naturally want them to get the best care and it can be easy to think that the best care is the most expensive - but that's not always true. By visiting multiple care homes, you can see for yourself where money is best spent.

Visiting care homes will also give you the opportunity to ask questions about any additional costs you might incur which aren't included in the headline price, as some care homes charge extra for additional care elements like physiotherapy and dental care, or travel to a medical appointment - for example - which could see you even further out of pocket.

Don't try to get rid of your assets

If the value of your assets is more than the capital limits and you try to give money or your home away to family or friends to qualify for funding, the council will likely deny your application anyway. This is because of 'deliberate deprivation of assets' which means they can and will refuse you if you've tried to mislead them about how much money you have.

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