Social care reforms axed: What it means for you

Social care reforms which would have capped the amount you pay for personal care costs in your lifetime have been scrapped. Here's what it means for you...

Angela Kerr Director, Editor

Social care reforms which would have capped the amount you pay for personal care costs in your lifetime have been scrapped after years of delay.

The plans were first set out by the previous Conservative government in 2021 and were due to come into force in England in October 2023. But in October 2022 the planned social care reforms were delayed until October 2025.

However the plans were officially been dropped by the new Labour government in 2024. We outline what the proposed social care reforms were and where you stand now they’ve been scrapped.

What were the planned social care reforms?

Under the planned social care reforms, in England:

• No one would pay more than £86,000 in care costs over their lifetime
• Anyone with less than £20,000 of assets wouldn’t have to pay anything towards their care from their assets. This ‘lower capital limit’ would have been an increase from the current £14,250
• If you had between £20,000 – £100,000 in assets you would be eligible for some means-tested financial support on a sliding scale. The planned upper limit of £100,000 (as opposed to the existing limit of £23,250) would mean more people would be eligible for state support.

Find a local independent financial adviser through our partners at Unbiased.

How would a cap on lifetime costs of care have worked?

Someone in need of care support would have had to approach their local authority for an assessment. The local authority would deem what level of care was necessary to meet their needs and will pay accordingly once the £86,000 cap had been reached by the individual.

Why were the social care reforms axed?

Chancellor Rachel Reeves scrapped the social care reforms shortly after the Labour Government came into power in 2024, alongside other announcements including big cuts to hospital and road projects, in a bid to plug what she called a £22bn hole in public spending that was “covered up” by the Conservative government.

How much will I need to pay for social care?

In 2011, the Dilnot commission estimated that one in 10 adults aged 65 were likely to spend more than £100,000 on care during their lifetime. This rose to 1 in 7, according to a Department of Health and Social Care report in 2021.

Is there any limit on the amount I need to pay?

Now that the social care reforms have been scrapped, the existing system of paying for social care is set to continue. So, if your financial assets are below a certain threshold, you will qualify for help with your care costs. This is assessed via a means test. Whether or not your house is included in this calculation depends on your circumstances – read on for more on this.

In England, if the total value of your assets is less than £14,250, you won’t need to contribute from your assets, although you may still be asked to pay something from your income. If your assets are between £14,250 to £23,250, you’ll pay on a sliding scale. While If you have more than £23,250, you’ll usually need to meet the full cost of your care.

Will I have to sell my house to pay for care?

You can avoid having to sell your house to pay for care if you or your spouse / partner (or qualifying dependants) want to continue living in your home. A qualifying dependant could be any of the following who also lives in your home:

• your spouse
• your civil partner
• your unmarried partner
• a close relative over 60 (or incapacitated)
• a close relative under 16 for whom you are legally responsible
• your ex-spouse / partner if they are a single parent

If you (or a qualifying dependant) will no longer be living in your home, the value of your home will be included in the means test. But if your home will still be occupied by one of the above, then only your other assets count.

Find out more useful information in our guide How to avoid selling your house to pay for care.

How did the government plan to pay for social care reforms?

It was planned that from April 2022, national insurance and dividend taxes would increase by 1.25p. Then, from 2023, National Insurance would go back to its usual rate while the extra money would be collected by a new Health and Social Care Levy.

But the Health and Social Care Levy did not go ahead. From 6 November 2022 the temporary 1.25% point increase to NI rates was reversed.

Find a local independent financial adviser through our partners at Unbiased.

How will social care reforms affect Scotland, Wales and Northern Ireland?

The social care reforms including the £86,000 cap would only have applied to England. Find out more about the rules in Scotland, Wales and Northern Ireland in our guide How to avoid selling your house to pay for care.

It’s important to understand your potential care costs and what it will mean for you in the future. Getting the right financial advice for your circumstances is key, so find your perfect financial adviser now.

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