Aegon – new social care charging reform

by | Nov 18, 2021

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Aegon welcomes further details of social care deal as Government proposes £200 per week for ‘room and board’ alongside £86,000 care cap

Steven Cameron Pensions Director at Aegon comments:

“The Government previously announced that individuals would from October 2023 not be asked to pay more than £86,000 towards the costs of social care. This was a very welcome decision which will avoid individuals potentially finding their lifetime savings are wiped out if they need care over many years.

“However, those in residential care homes pay not just for care but for room and board. It was always the plan that these extra costs would have to be met by the individual in addition to the £86,000 cap. The Government has now proposed a national notional charge for room and board, or Daily Living Costs of £200 per week. This gives more clarity around this element of possible future costs.


“As an example, if an individual is paying a total of £700 per week to a care home, in the latest proposal £200 of this will be deemed Daily Living Costs and the remaining £500 care. The £500 per week will count towards the £86,000 cap.

“£200 per week for room and board may look proportionately low and some might have expected it to be set higher. But by setting it low, the Government is counting more as care which will mean individuals reach the £86,000 cap and stop paying for care sooner.

“This proposal applies only in England as other parts of the UK have their own rules. It’s an important step taking us closer to helping people plan ahead for possible care costs in later life. Many may wish to seek financial advice on their options. If an individual has a pension of £200 per week or more (including their state pension) this could be used to finance the ongoing room and board costs. Making sure they have other assets of £86,000 could then cover the care element and give individuals the comfort that any remaining savings can be passed on as an inheritance.


“Some individuals may wish to opt for a higher quality of care home than that which a local authority might offer in which case they will be expected to fund the extra care and Daily Living Costs.”

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