The government has announced new plans to change how people pay for their care in the future. It hopes to reduce the number of people having to sell their homes to pay for care, but will the measures be enough?
We all like to believe that we’re invincible. When I picture myself in my older years, I like to imagine myself grey and hiking across the Smoky Mountains in the US.
But according to the Association of British Insurers, up to three quarters of 65-year-olds will need care at some point. With medical treatments advancing, and life expectancies increasing, the Office of National Statistics predicts that between 2010 and 2035, the number of people aged over 85 will more than double, and the number aged over 95 will more than quadruple. So the time may soon come when we all need some level of care, either in our homes or in a residential care home.
The cost of long-term care
Long-term care is expensive. According to the NHS Information Centre, the average cost of basic care in your own home is thought to be around £20,000 over an average lifetime, while someone in a care home could expect to pay out £100,000 throughout their stay.
And not many people have this kind of money lying around in their older years. It’s common for people to have to sell their property to pay for long-term care, meaning they lose the comfort of their home while their families may miss out on their inheritance. Indeed, 40,000 people have to sell their homes every year to pay for care bills.
It’s a crisis that’s been talked about for years. But today, following a review led by Andrew Dilnot, the government announced plans for 2017 that will cap the cost of care to £75,000 in a person’s lifetime. The intention is that people will no longer face an unlimited bill for care, enabling them to plan for their care costs and reducing the need to sell their home to fund it.
As well as introducing the cap, the government plans to raise the asset threshold you need to meet before you’re required to pay for your own care. The limit is currently £23,250, including the equity in your home. Under new plans, tiered financial support will be available to anyone with assets of up to £123,250.
The rocky road ahead
There are plenty of details that still need to be ironed out. For example, the £75,000 cap will only apply to care costs. So if you need to go into a residential home, you still have to pay for non-care costs like accommodation and food, which can be around £10,000 (or more) a year. Furthermore, the cap will only apply to care at normal council costs – so if you go into a home that charges more than your local authority rate, you may have to pay extra.
Will these changes by the government prompt you into thinking more about your plans for later life? Have you had experience of organising and paying for care for yourself or a loved one? How was the experience and would these measures have helped you?