The recent Dilnot Commission proposals raised the prospect of more affordable long-term care in the future, but self-funding residents could still face a bill of nearly £200,000.
The figures from Partnership are based on a four year stay in a residential care home under the new rules proposed by the Dilnot Commission.
There remains such a substantial cost because the Dilnot proposals cover funding for the cost of care, not the cost of accommodation.
Partnership point out that accommodation fees can be two to three times the combined cost of personal and nursing care fees.
Four years is the average life expectancy of an immediate care annuity customer with Partnership.
If they had care costs of £1,000 per week, they would pay £208,000 over a four year period. The new system proposed by Dilnot would result in them still paying £189,000 over four years.
As we recently commented to one of the trade publications, there is a real danger that the Dilnot proposals will lull people seeking care into a false sense of security over total costs.
There is a misconception that, once you have paid the first £35,000 of social care costs under the proposed Dilnot structure, the rest of your care costs will be covered by government.
In reality, the government will not pick up the tab for hotel costs or general living costs. As a result, each year spent in a residential care home could continue to cost £40,000 to £50,000, depending on the area of the country and care home selected.
Assuming the Dilnot Commission proposals are accepted by government, they will still take some time to implement – maybe as long as five years.
The need for professional independent financial advice on care fees planning has never been greater.
Photo credit: Flickr/buddawiggi
