From October 2023, the UK government introduced a new cap on the amount anyone in England will be expected to spend on their personal care over their lifetime. These changes only apply to England. Scotland and Wales are undertaking their own reviews, so at present their existing funding arrangements remain in place.
It is worth noting that this cap of £86,000 per person is only on personal care and this figure does not take into account daily living costs (DLCs), such as accommodation in an elderly care home, food, toiletries, utility bills and other expenses.
Personal care includes the nursing and assistance they may need in their later years, including help with feeding themselves, washing, dressing and managing any health problems. This applies to either care received at home and within an elderly care home.
For example, someone may be paying £900 a week while in an elderly care home, but only £300 of this goes towards the cost of their ‘care’ and is added to their capped lifetime bill, the remaining £600 would be classified as DLCs and not included in the capped costs.
If the bill for the ‘care’ component reaches £86,000, these care costs will be covered by the government, reducing the overall bill for the individual. However, the DLCs will remain the responsibility of the individual or their family.
You can find the full details on the government’s latest care reforms on their website.
The cost of elderly care homes
According to the British Geriatrics Society, the average stay in an elderly care home in the UK is two years without nursing and one year for those who require nursing.
The average elderly care home fees across the UK vary depending on geographical location. According to the consumer watchdog Which?, the average cost of a residential care home in 2022-23 ranged from £790 in the East of England to £941 a week in Scotland.
You would therefore need to be paying at least £827 a week for just the ‘care’ element of your residential fees before the government’s new cap applies to you. Therefore, the majority of people across the UK are unlikely to reach this £86,000 threshold when staying in an elderly care home for the expected two years.
Changes to financial support thresholds for elder care
According to the Office for National Statistics, in England, in 2022-2023 there were around 137,000 people living in elderly care homes who are self-funders, while around 235,000 people receive some level of financial aid from their local authority.
The figures for those receiving financial aid will most likely change over the coming years, as this care reform also includes changes to the threshold for receiving financial support towards elder care costs. The ‘upper capital limit’ (UCL) has risen from £23,250 to £100,000. People whose finances come in above the UCL will have to self-fund the full cost of their care, plus their DLCs.
The ‘lower capital limit’ (LCL) has risen from £14,250 to £20,000, so people with assets under £20k will not have to pay anything for their care.
Anyone who has assets above £20,000 but below £100,000 will pay a certain amount towards their care. The exact amount is decided on a tariff-based system based on their financial situation.
Whatever your situation is, care for those in their later years is something that requires financial planning before the need occurs. Our Advice section on our website can help with this and much more.