It is estimated that over 40,000 homes a year are sold, and hard earned savings are exhausted, to pay for the cost of long term care.
The average cost of care is around £700 per week, but it can be as much as £1,200 per week.
This will depend on where you live and the standards of accommodation offered.
Care within your own home may not be cheaper, especially if you need more than just a few hours of assistance each day.
The need to secure a sustainable funding settlement for social care has never been more urgent, with local government and NHS finances under significant pressure and demand for services increasing as the population ages.
The reform of social care funding has been the subject of much debate for years and it seems like a solution to solve the problem of long term care funding is still some way off.
The government has challenged the financial services sector to come up with solutions to solve it. At least if a market develops for financial products people could insure themselves against the cost of their contribution.
If a flexible solution were adopted it could suit the majority of those needing care and perhaps a fairer system for all would evolve.
In the Budget this year the government announced the introduction of a £72,000 cap on reasonable care costs and an upper capital limit of £123,000 for means testing.
The £72,000 cap is calculated based on the weekly amount the local authority would be prepared to pay for your care if they were providing it at their ‘usual rate’, not on the actual cost of the care which in most areas is significantly more than local authorities will pay.
It is also important to note that this cap excludes accommodation costs set at £12,000.
The increase in the means test threshold to £123,000 means that once the individuals capital is depleted to £123,000 the local authority will assist with the funding of their £72,000 cap.
The new social care cap is welcome news for many as it will protect the assets of those who face the highest social care costs, and will particularly benefit older people who have worked and saved all their lives to build up their assets.
Deferred payment schemes are to be rolled out nationwide to allow local authorities to secure the cost of care against someone’s home.
Once the property has been sold (either on death or entry to a care home), the costs of care are deducted from the sale proceeds.
Until we have some certainty over the way forward it is paramount to be proactive and plan ahead for the cost of long term care.
It is important to select a suitably qualified and experienced independent financial adviser who can review all of your options for paying for long-term care.
Do speak to us if you have any questions.
