The £86,000 Care Cap: Reform Status and What It Means Now

The Health and Care Act 2022 introduced a statutory framework for a lifetime cap on personal care costs. The plan, announced September 2021:

• Care users would pay up to £86,000 of personal care costs over their lifetime, after which the local authority would meet further personal care costs.
• Means-test thresholds would rise — upper capital limit from £23,250 to £100,000; lower capital limit from £14,250 to £20,000.
• "Daily living costs" in care homes (food, accommodation) would NOT count towards the cap, set at around £200/week.
• Self-funders would for the first time get full cost protection. Funded as a top-up by NHS through national insurance increases.

Commencement timeline: October 2023 → deferred to October 2025 in November 2022 by Jeremy Hunt → scrapped by Rachel Reeves in July 2024 as part of fiscal consolidation. The Health and Care Act sections remain on the statute book but are not commenced.

Under the Care Act 2014 and the Care and Support (Charging and Assessment of Resources) Regulations 2014:

• Capital over £23,250: pay in full as a self-funder.
• Capital £14,250 to £23,250: council pays eligible care but charges you £1/week for every £250 of capital above £14,250.
• Capital below £14,250: council pays eligible care; you contribute from income (State Pension, private pension, benefits) less the Personal Expenses Allowance (£30/week 2025-26).
• The home: counted as capital in residential care after 12 weeks (the "12-week property disregard"), unless a spouse, civil partner, or dependent relative still lives in it. Not counted at all for care at home.
• Income: most income counted; some disregarded (DLA mobility component, PIP mobility, war pensions in part).
• Notional capital: capital you gave away to qualify for funding ("deliberate deprivation") is still counted as yours.

Wales, Scotland and Northern Ireland have different (more generous) thresholds — see jurisdiction variants.

The single biggest impact of having no cap is on homeowners. A typical scenario:

• Mary, widowed, owns a £300,000 house, has £40,000 savings, modest private pension. Develops dementia. Moves into a care home costing £1,200/week (£62,400/year).
• Council means-tests her. The house counts as capital after 12 weeks (no spouse). Total capital around £340,000.
• Mary self-funds. £62,400/year drawdown. After 4 years her capital is below £23,250 (the house has been sold, savings depleted).
• Council picks up funding at year 5. Mary pays £1/week per £250 capital above £14,250 until savings reach the lower limit.
• Net cost to Mary: around £250,000-£280,000 over those 4 years.

The cap would have limited her exposure to £86,000 of personal care costs (so around 1.5-2 years before the council took over). Without it, the homeowner squeeze continues.

Practical mitigations: deferred-payment agreement (council pays now; recovered from estate); spouse remaining in home (12-week disregard becomes indefinite); careful planning of LPAs.

As at May 2026 the government has not announced a successor to the £86,000 cap. Several possibilities are circulating:

• Sue Gray review and Casey Commission on social care funding, commissioned by the Labour government in 2024 — Phase 1 medium-term reform options expected 2027; Phase 2 long-term reform 2028.
• Council Tax surcharge / dedicated social care levy — increasingly discussed as alternative funding.
• Universal capital insurance scheme — German-style mandatory long-term care insurance.
• Increased thresholds without a cap — raising £23,250 limit substantially as a partial reform.

Plan around the current rules. Do not delay essential decisions (LPA, deferred payment, family arrangements) in the hope of reform that may not arrive for years.

Six things to do regardless of reform:

• Make Lasting Powers of Attorney — Property and Financial Affairs LPA, Health and Welfare LPA. Both. Without LPAs, the family has to apply to the Court of Protection (expensive, slow). Cost of LPA: £82 OPG fee per LPA.
• Consider a deferred-payment agreement — the council pays for your care while you live in your home or while it is being sold; the council recovers from the eventual sale or your estate. Available to most homeowners. Less stress than a quick forced sale.
• NHS Continuing Healthcare assessment — if the primary need is health-related, NHS pays the full cost with no means test. Often missed; appeal CHC refusals.
• Use Attendance Allowance — non-means-tested benefit for over-65s with care needs. £73.90 or £110.40 per week (2025-26). Not counted as income in council means test for residential care, partly counted for care at home.
• Top-up fees — if the council's standard rate doesn't cover your chosen home, family can pay the top-up (under written agreement). The top-up cannot come from the cared-for person's capital below the limit.
• Local Government Ombudsman for disputes about council care funding decisions. Process is free and often effective.