What is the care cost cap and when does it take effect?

The Government’s 2021 Vision for Adult Social Care means that from October 2023, they will introduce a new £86,000 cap on the amount anyone in England will need to spend on their personal care.

This means that even where someone has significant assets and is self-funding their care plan, they will not need to spend more than £86,000 on their personal care over their lifetime. The cap also applies to domiciliary care.

Personal care means the residential care, nursing care, and support needed, whether it’s with washing, dressing, mealtime assistance, or managing health problems.

There are several aspects of the care home service that are not classed as personal care – this includes accommodation, food, energy bills, lifestyle and well-being, and consumables.

N.B. There is limited information at this time and the contents of this page uses the available Government guidance.

What else is changing?

Capital limits for care funding are changing to raise the threshold as to when residents must pay for their care.

Savings and assets below £20,000: residents will be state-funded, with no money taken from assets or savings. However, contributions from income may be required to put toward care costs

Savings and assets between £20,000 and £100,000: potential contributions from state funding, which will be means-tested. Residents will have an ‘independent personal budget,’ which would be reviewed annually and the spending on care tracked. Individuals will contribute up to a limit of 20% of their assets per year towards care costs.

Assets of £100,000 and above: care will be self-funded until assets drop below £100,000 or the £86,000 care cap is reached.

It’s important to understand that any other care-related costs – such as accommodation, food, entertainment, utility bills, and consumables, do not count towards the £86,000 cap so residents or their families will continue to cover these costs

Personal contributions made towards care by the individual will be tracked from October 2023. Any contributions made before that time will not be counted.

Everyone will now have the cost of their personal care calculated up to the limit of £86,000, after which point the Government will cover personal care costs.

Any other care-related costs – such as room, food, entertainment, and utility bills – do not count towards the £86,000 cap, so residents or their families will continue to cover these costs.

Whilst it might take some time to reach the £86,000 threshold, the state will make a greater contribution for some people; and for those people requiring care over many years, costs will come down.

Useful resources

Read Government guidance and further case studies.

For independent financial advice, find a local Society of Later Life Advisers (SOLLA) financial advisor.