If you remember the Health and Social Care Levy being announced with a lot of fanfare in 2021… you’re not imagining it.
However, the key update is simple: there is no Health and Social Care Levy in place today. It was introduced briefly via higher National Insurance in 2022/23 and then cancelled and repealed before it ever became a separate stand-alone tax.
This post updates our original 2021 article and (more importantly) resets expectations about what this means for care costs and planning in 2026.
A quick summary
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The Levy was announced in September 2021.
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It was first collected as a temporary 1.25% increase to certain National Insurance rates from 6 April 2022.
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The government then cancelled it: the NIC increase was reversed from 6 November 2022, and the planned separate levy from 6 April 2023 did not go ahead.
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The repeal legislation received Royal Assent in October 2022.
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So if you’re looking for a line on your payslip called “Health and Social Care Levy,” it isn’t there.
So how does social care funding work now?
This is where things get misunderstood. The levy being cancelled didn’t magically fix or simplify social care. The system is still largely means-tested, and it’s still very easy for families to end up self-funding.
A quick reminder of the England position (2026/27)
For England, the current charging framework still uses the familiar capital limits:
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Upper capital limit: £23,250
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Lower capital limit: £14,250
In practice, that means:
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If your capital is above £23,250, you are generally treated as self-funding for care home costs.
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Between £14,250 and £23,250, you pay what you can from your income, plus a means-tested contribution from capital, commonly described as £ 1 per week for every £250 (or part of £250) between the limits.
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Below £14,250, you typically pay from income only (subject to the financial assessment).
And yes: your home can be counted in the means test in many situations (with important exemptions, e.g., if a spouse/partner or certain dependants remain living there, the details depend on circumstances and the local authority assessment).
What happened to the “£86,000 cap” and the big reforms?
Back in 2021, the headlines were about:
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a higher means test,
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and a lifetime cap on personal care costs.
Those reforms were delayed and then scrapped.
The House of Commons Library briefing (and the PDF version) notes the reforms were pushed back and later cancelled (announced in July 2024).
The King’s Fund also discusses the decision to abandon the cap and what that means.
A practical note: NHS-Funded Nursing Care (FNC) and Continuing Healthcare
Two areas that often get mixed up:
NHS-Funded Nursing Care (FNC)
If someone is in a care home with nursing, the NHS may pay a contribution towards the nursing element if they meet the criteria. In England, the standard rate was set at £254.06/week from 1 April 2025 (with a higher rate in limited legacy cases).
NHS Continuing Healthcare (CHC)
This is different. CHC is where the NHS pays for a package of care because the primary need is a health need. It can be a full funding route, but it’s assessed, and it’s not the norm.
So what should you actually do in 2026?
This is the part that matters.
1) Assume care might be a financial risk you need to plan for
Most families plan for retirement income, but don’t quantify the “care tail risk”. Even a simple conversation about:
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“What would we do if one of us needed care for 2–5 years?”
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“Would we sell the house, rent it, or protect a spouse at home?”…puts you ahead of 95% of people.
2) Get the non-money basics sorted
If care is ever needed, the admin is often harder than the money:
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Wills that still reflect reality
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Lasting Powers of Attorney (property/finance + health/welfare)
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A clear list of accounts, policies, pensions, and key contacts
3) Be extremely cautious about “care fees trust” sales pitches
If someone’s pushing a one-size-fits-all structure with urgency, or implying you can “guarantee” avoiding care fees, that’s a red flag. Most good planning here is slow, cautious, and based on your actual goals (including fairness between spouses and children).
4) Reframe the goal: “protect the well spouse”
In real planning, it’s rarely about “beating the system”. It’s usually about ensuring:
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The healthy spouse can keep living normally, and
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decisions aren’t forced under stress.
