Government Statutory Guidance on Care Fees (England) 2024 to 2026 Position

The Care and Support Statutory Guidance (updated 22 July 2025) confirms that England’s care‑fee means‑testing rules remain unchanged: the upper capital limit stays at £23,250 and the lower limit at £14,250, exactly as they have been since April 2010.  The Government formally cancelled the planned adult social care charging reforms (including the £86,000 cap and £100,000 upper limit) on 27 September 2024, meaning the Care Act 2014 reforms will not be implemented.  The 2025–26 Local Authority Charging Circular confirms the freeze again.

1.  What happened to the Care Act 2014 reforms?

The Care Act 2014 originally proposed major changes to adult social care charging, including:

• A lifetime cap on personal care costs (£86,000)

• A £100,000 upper capital limit

• A £20,000 lower capital limit

• National guidance on daily living costs (capped at £200/week)

• Continued NHS funding for nursing care

• A modernised means test designed to let people keep more of their assets

These reforms were scheduled for October 2025.

However, the Department of Health & Social Care confirmed on 27 September 2024 that the planned charging reforms “will not be taken forward”.

This cancellation aligns with your note that the incoming Labour Government (July 2024) formally scrapped the implementation timetable.

2.  What guidance now applies?

2.1 Care and Support Statutory Guidance (CASSG)

The Care and Support Statutory Guidance is the current legal framework for local authorities.  Latest update: 22 July 2025.

It covers:

• General responsibilities

• First contact & needs assessment

• Charging & financial assessment

• Person‑centred care planning

• Safeguarding

• Cross‑border issues

• Annexes on capital and income treatment

2.2 Local Authority Charging Circular 2025–26

Published 3 February 2025, confirms:

• Upper capital limit: £23,250

• Lower capital limit: £14,250

• No change to capital thresholds for 2025–26

• Personal Expenses Allowance (PEA) and Minimum Income Guarantee (MIG) uprated only for inflation

3.  Current Means‑Testing Rules (England)

3.1 Capital Limits (unchanged since April 2010)

• £23,250+ → You self‑fund all social care costs

• £14,250–£23,250 → You pay from income + tariff income (£1 per £250/week)

• Below £14,250 → Local authority funds care; you contribute only from income

These limits have been frozen for 16 years, despite inflation and rising care costs.

3.2 What costs are included?

Personal Care Costs

• Washing, dressing, toileting, mobility, eating

• Means‑tested

• No cap

• No reform planned

Daily Living Costs (“Hotel Costs”)

• Accommodation

• Food

• Utilities

• Still fully chargeable and means‑tested

• No national cap (the £200/week proposal was part of the cancelled reforms)

Nursing Care Costs

• Still funded by the NHS via Funded Nursing Care (FNC)

• Not affected by the scrapping of the reforms

4.  Why the freeze matters: the real‑world impact

The capital thresholds were set in 2010 and have never been uprated.  During that time:

• Average care home fees have risen from ~£550/week to £900–£1,200/week

• House prices have risen significantly

• More people fall into the “self‑funding” category simply because the thresholds are outdated

The Government’s own guidance confirms the freeze again for 2025–26.

This means more people pay full fees, and more estates are eroded by care costs.

5.  Why proactive planning is now essential

With the reforms cancelled and thresholds frozen:

5.1 People will continue to self‑fund earlier and for longer

Even modest savings or a small property place individuals above the £23,250 limit.

5.2 No cap on care costs

Lifetime spending on personal care can exceed £150,000–£300,000 depending on longevity and needs.

5.3 Asset protection must happen early

Local authorities can challenge deprivation of assets if done after care needs arise.  Planning must be done while fit, healthy, and with no foreseeable care requirement.

5.4 Families risk losing most of the estate

Without planning, care fees can consume the majority of a home’s equity.

6.  What the Care and Support Statutory Guidance says about financial assessment

The July 2025 update includes refreshed annexes on:

• Treatment of capital (Annex B)

• Treatment of income (Annex C)

These govern:

• What assets are counted

• What is disregarded (e.g., certain compensation payments, savings credit disregards)

• How tariff income is calculated

• When property is included or disregarded (e.g., mandatory disregard if a spouse still lives there)

Updates in 2024–25 include new income disregards and clarifications around pensions and compensation payments.

7.  Summary

The Care Act reforms are gone. The capital limits remain frozen. There is no cap on care costs. Planning early is now essential to protect family wealth.

Our Fees:

Contact  Book Tel/Vid Call  Calculators  Our Fees