More people face self-funding care as means-testing thresholds frozen for 14th consecutive year

More people face self-funding their care in England after the government froze means-testing thresholds for a 14th consecutive year.

The capital limits governing access to care in England in 2024-15 will remain at levels set in 2010, the Department of Health and Social Care (DHSC) confirmed today in its annual social care charging circular.

This means people with assets worth more than £23,250* will continue having to fully fund their care unless their council sets a more generous threshold for services other than permanent care home placements, which very few do.

Anyone with assets worth less than £14,250* will not have to contribute to their care from these, though they will be required to make use of their income to finance services, as now. Those with savings between the two figures must contribute up to £36 per week to their care from these assets.

More and more people dragged into paying for care

From 2008-10 to 2018-20, average household wealth in Great Britain grew by 50% in cash terms, from £204,300 to £302,500, according to Office for National Statistics figures.

This means that each year, more and more people are being dragged into fully funding – or funding an increasing share of – their care costs because of the ongoing freeze in capital thresholds.

The announcement comes with the government having delayed reforms to social care charging which would raise the lower capital threshold to £20,000 and the upper limit to £100,000. The DHSC has estimated that this change would make an additional 50,000 people eligible for state funding towards their care a year.

The reforms, also including an £86,000 cap on people’s liability for personal care, were due to come into force in October 2023 but are now slated for introduction in October 2025.

Doubts over social care charging reforms

However, there are significant doubts over whether the reforms will go ahead.

A National Audit Office report last year found that the DHSC had disbanded the programme board responsible for the reform, and that stakeholders had said the department would have to have started preparing councils in the summer of 2023 for implementation by October 2025, which did not happen.

And with an election due by January 2025 that Labour is tipped to win, the opposition has given no indication whether it would implement the reforms in power.

Though it has frozen the capital thresholds, the DHSC will make inflationary increases to allowances that limit how much councils can take from people’s incomes in care charges, in 2024-25.

Inflationary increases to allowances

The minimum income guarantee (MIG), which provides a floor below which a person’s income must not fall as a result of charges for community-based care, will rise by 6.7%. As an example, for a single person aged 25-66, the weekly rate will increase from £103.65 to £110.60 from April.

There will also be a 6.7% increase to the personal expenses allowance (PEA), the minimum sum funded care home residents must be left with after charging, which will rise from £28.25 to £30.15 a week.

An inflationary increase will also be applied to the savings credit disregard, an extra sum eligible pensioners are allowed to keep above the MIG or PEA. This will rise from £6.50 to £6.95 per week for individuals and from £9.75 to £10.40 for couples.

How England compares to other UK nations

England’s system of means-testing for care of those who meet eligibility criteria is by far the least generous of the four UK nations.

While Northern Ireland operates the same capital thresholds for care home placements as England, its health and social care trusts generally do not charge for care at home, contrary to practice in England charging is routine.

In Wales, there is a higher single capital threshold for care home placements of £50,000, above which people must fund their care in full, while there is a £100 cap on weekly charges for care at home.

Personal care is free at home in Scotland, with care home residents receiving weekly personal care payments of – currently – £233.10 per week. Other care home costs are means-tested but with more generous capital limits than in England (£20,250 and £32,750 in 2023-24).

*The capital thresholds include the value of the person’s home if they are in a permanent care home placement and their home is not occupied by their partner, a relative aged 60 or over or who is incapacitated or a child.