Boris Johnson’s reform of social care is expected to cost billions, but it will not spare families from the pain of having to sell their home and raid their savings to cover nursing and residential care. These are seven reasons social care fees can continue to consume your family’s wealth.
1. 1.The Dilnot Commission recommended that a maximum of PS35,000.
Boris chose to cap the PS86,000 at a significantly higher level, as it has increased more than inflation over the interim.
Shaun Moore is a tax and financial planning specialist at Quilter. He stated: “This will put a pretty large burden on individuals to shoulder up enormous costs for their care.”
2. This does not cover all costs.The cost of a long stay at a nursing home could reach hundreds of thousands of pounds.
This is because the PS86,000 limit only covers personal care expenses. This does not include daily living expenses such as accommodation and food, which could easily run to PS1,000 per month.
Just Group estimates that these could be able to race past PS200,000 before the family can spend the maximum PS86,000 for the personal care component.
These daily living expenses will not stop even after you have met the requirements for the cap. One person could be eligible for up to PS400,000.
3. The sale of a home by a family will not be an option.Around 20,000 individuals have to move each year to pay for care. Louise Higham from Tilney’s financial planning department said that this trend is not likely to change.
Families should not be lulled into believing that all their needs are being met. Many will have to sell their homes in order to fund the new care system.
4. It is impossible to save enough money for care.Higham advised people to make more savings to cover care costs later in life. But in reality, most people will not because of uncertainty and complexity.
Most people won’t have the money they need to cover their daily living expenses in retirement.
5. 5. The two-year limit doesn’t apply.October 2023 will be the last day that the PS86,000 social assistance cap applies. After that point, people will not be able to start adding funds to their care accounts. The cap will not be applied to money spent before 2023 on care home fees.
It is highly unlikely that anyone in care will ever be able to reap the benefits of this.
6. 6.Also, the Government lifted the “floor”, at which time the local authorities will be responsible for the care expenses.
Local authorities pay a portion of the cost if the assets are below PS23.250 in England.
These will increase starting October 2023. If savings are below PS100,000. However, local authorities won’t be able to cover all costs if savings drop below PS20,000.
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Morgan Vine is the head of policy and influence at Independent Age. We don’t know how much assistance local authorities can offer when savings are below PS100,000. I expect that many people who are in need of care will continue to use almost all their property and savings.
7. It will be difficult to track care costs.Just Group research has shown that seven in ten people over the age of 45 who had to arrange care for their family members said they were overwhelmed by how expensive it was.
It will only get worse, as local authorities will have to keep track of how much each person spends on personal care in order to accurately calculate the cap.
Mike Stimpson is a partner in wealth management Saltus. He said that we require more information on the administration, tracking, and recording of the cap. It is very likely that once the cap has been reached, the government will no longer fund private care homes. This could lead to people being forced to pay full price or moving care home.
All these issues mean that more families will lose their inheritances due to social care costs, despite reforms.
Publié Sun, 12 September 2021 at 05:30:00 +0000