Jacobs was knighted in 1988 and on 18 October 1997, he was created a life peer as Baron Jacobs, of Belgravia in the City of Westminster. He took the Liberal Democrat whip until January 2011 when he resigned from the party, citing opposition to its policies on taxation. He now sits in the Lords as a non-affiliated member.
At the time of his peerage he also received also an Honorary Doctorate from the University of Haifa. Jacobs has been married to Evelyn Felicity Patchett since 1954; they have one son and one daughter. Lord Jacobs ranked 614th in the Sunday Times Rich List of 2008 being estimated to be worth £128 million due to driving schools and fast food.