Back to Square One on Care Fees Capital Means Test 2025

The Care Act 2014 was supposed to come into force in October 2023 and was then postponed until October 2025.

The new Care Act 2014 would have

• Maintained that the ‘nursing fees’ element of care was still fully funded by the NHS.
• Your ‘personal care fees’ element for washing, bathing, dressing and help in and out of bed etc.  would still be means tested and have a lifetime cap on fees at £86,000.
• Your ‘daily living costs fees’ for accommodation, food and utilities bills such as water, gas, electricity, your ‘hotel costs’ as we call them had guidance that care homes should charge no more than £200 per week and these again would be fully means tested.
• For the means test itself, the upper capital limit (the point at which you pay for all your personal care or daily living costs) was increased from £23,500 to £100,000 and the lower limit, where your capital has decreased and you pay for no personal care or daily living costs was increased from £14,250 to £20,000.
• Overall, meaning that more people would get to retain a greater share of their own capital when needing means tested care.

Rachel Reeves scrapped the Care Act 2014 and its introduction in October 2025 on 29 July 2024. 

See: Care Fees 2025

So, we are back to ‘square one’ and it is worthwhile refreshing yourself on what the ongoing capital means testing position is and what capital can be disregarded:

• Originally (and from 2014), we referred to government guidance issued to all local authorities called the Charging for Residential Accommodation Guide (CRAG).
• This was replaced (and is still in force) under Care and Support Statutory Guidance 2023 (introduced 1st June 2023 and updated 18^th February 2025), see: Care and Support Statutory Guidance

Your income and pensions are included in the means test but what about capital?

What Capital Is Means Tested?

• Buildings
• Land
• National Savings Certificates and Premium Bonds.
• Stocks and shares, SAY schemes, unit trusts, investment trusts, ETFs, ISAs.
• Savings in: banks, building society accounts, cash, precious metals etc.
• Most funds held in trust for you unless they are special injury or trauma trusts.

The above list is not exhaustive and you can find a full list within the government’s Care and Support Statutory Guidance.

What Capital is Disregarded?

• Surrender value of life insurance policies and annuities (if there is a surrender value).
• Payments in kind to you from charities.
• Special injury or trauma trusts such as the London Bombings Charitable Fund, We Love Manchester Emergency Fund and Infected Blood schemes to name a few.
• The above list is not exhaustive and you can find a full list within the government’s Care and Support Statutory Guidance.
• Residential property is disregarded in certain circumstances, see below:

When is Property Disregarded?

• Your main residential home (that you lived in immediately before needing care) can be disregarded for the care fees means test 
• Your partner, former partner or civil partner, except where they are estranged still lives in your home.
• A lone parent who is your estranged or divorced partner.
• Any relative that lives in the home that is either, any or all of the following
• Age 60 or more.
• Is a child under age 18.
• Is incapacitated

There is a full list of ‘disregard’ relatives that can be found in Annex C section 35 and 36 in the government’s Care and Support Statutory Guidance.

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