The social care available to England’s ageing population has rarely ever felt so crucial an issue. The challenges facing older people with care needs continue to grow. However, the UK government has taken little action since it promised a Green Paper at its 2017 Spring Budget.

The government has said it plans to make the adult social care system sustainable and that it wants to place care and support services on a firmer financial footing. It has also set out plans to introduce a lifetime limit on individuals’ care costs.

Independent Age and the Institute and Faculty of Actuaries believe that introducing a limit on the amount individuals have to contribute towards their own care is the right way forward. It introduces an element of social insurance where previously none has existed. A cap on care costs, designed in the right way, could bring much needed clarity and simplicity to the care and support system. Set at the right level, it could even help families to plan for later life with greater certainty and be clear about their own responsibilities to save and pay for care.

This report presents new insights on the impacts that different approaches to introducing a cap, and changing the means-test in England’s publicly-funded system of social care, could have on pensioner households who need care. We have modelled different levels for the cap and our analysis specifically focuses on:

  • a £35,000 cap, based on the Dilnot Report;
  • a £72,000 cap, contained in the Care Act; and
  • our proposed all-inclusive £100,000 cap that includes the local authority rate, daily living costs and 'excess' top-up fees based on average care costs.

Our intention is to show the impact that each of these care cap levels will have on cumulative care costs.