Is there a care home fees cap?

The care home fees cap was originally announced in 2021 to help manage the cost of care provision. This was part of a series of changes to the social care system.

Care home fees were capped at £86,000 which was the maximum amount that anyone would need to pay for their personal care. Changes were also made to the care threshold.

The measures were due to be introduced in October 2023 and the deadline was extended to October 2025, before being scrapped by the Labour government.

The cap undoubtedly served as a transient beacon of hope for many, promising fairness and financial relief.

However, what does it mean now that the care fees cap has been scrapped? Will it be re-introduced and what are the new rules? In this article, we’ll explore all of these questions and more to help make it easier for you to plan ahead for later life.

Background on the care home fees cap

The concept of a care homes fees cap first gained attention following the Dilnot Report in 2011, which proposed a maximum limit on the amount individuals would need to pay for their personal care. This cap—set at £86,000—was designed to protect people from the financial strain of unlimited care costs while ensuring access to high-quality support.

However, the road to implementing this promise has been anything but straightforward. Originally slated for introduction in 2016, the cap faced repeated delays due to funding challenges, political changes, and competing priorities within social care reform. As a result, families were left in limbo, uncertain about how best to plan for care.

Current situation in 2025

The long-promised care fees cap was scrapped on July 29th, leaving many families facing mounting debts and limited choices. Labour said that the plans were scrapped to tackle a spending ‘black hole’ inherited from the Conservative government.

In the absence of the cap, the financial burden on individuals and families continues to grow.

Currently, care home fees in the UK are means-tested. Local authorities assess an individual’s financial situation to determine eligibility for support. If someone has assets over £23,250 (in England), they are often required to cover their own care costs, which can quickly add up. While local authority contributions can help those with lower assets, many families still find themselves facing significant expenses, including additional charges for accommodation, meals, and other services.

Without a care homes fee cap in place, the financial strain remains a pressing concern for thousands across the UK.

What the care fees cap would have meant for families

Had the care fees cap been implemented as planned, it would have offered a lifeline to countless families navigating the financial complexities of later-life care. The cap, set at £86,000, would have ensured that no individual in England paid more than this amount for their personal care needs over a lifetime, regardless of how long they required care. This would have brought a sense of certainty and relief, particularly to those facing the daunting prospect of depleting their savings or selling their homes to cover care costs.

However, the care homes fee cap would only have applied to personal care expenses, such as assistance with dressing, washing, and eating. Daily living costs—like accommodation, meals, and utilities—would still need to be covered separately. While these additional expenses could still present challenges, families would have been better able to plan, knowing that their exposure to spiralling personal care costs was limited.

While the cap would not have solved all challenges in funding care, it would have created a more equitable system, ensuring no one bore an unlimited financial burden for necessary care.

The financial strain associated with unlimited care costs is felt most acutely by middle-income families, who often fall into a gap where they have too much to qualify for state aid but not enough to comfortably cover private costs.

Without a cap, inequalities in access to care are growing. Those with significant wealth can afford premium care, while others face limited options, accepting care homes or services that may not fully meet their needs. The reliance on private funding also perpetuates a system where care quality can feel tied to financial means, rather than the universal right to dignified later-life care.

If you are one of the many families uncertain about how to manage the growing care costs, check out our advice page, ‘Our guide to paying for later life care' and our blog ‘Ultimate guide to self-funding care.’

Implications of no cap in 2025

The broader care sector is feeling the strain too. Care providers, already stretched thin, are grappling with the rising costs of wages, utilities, and supplies. According to the Nuffield Trust, care providers face an extra £2.8 billion in additional costs and have limited ability to absorb this. Many homes face financial uncertainty, increasing the risk of closures that could leave vulnerable individuals without suitable care options. Staff in the sector are also affected, as funding shortfalls make it harder to offer competitive pay and training, contributing to staff shortages and burnout.

The absence of a care fees cap underscores the urgent need for long-term solutions to create a fairer, sustainable system. Without it, families and care providers alike are left to bear the weight of an underfunded, inequitable system, with little relief in sight.

Need help navigating care costs?

Understanding care home fees and planning for the future can feel overwhelming, especially with the uncertainties surrounding a fees cap. At Autumna, we’re here to support you. Whether you're looking for detailed guidance, exploring care options, or need help comparing costs, our team and resources can help you make informed decisions.

Call our expert advice line today on 01892 335 330. Alternatively, visit our website to search for care providers. You can also answer a few quick questions on our Shortlisting tool to receive a list of more personalised suggestions.

Let us guide you towards the best solutions for you and your loved ones.