Last week the Government launched its latest consultation on the reform of the UK care system. This article is concerned with the proposals regarding the funding of care costs. Previously the Dilnot Commission examined the future of care funding making 2 key recommendations:

  1. Cap on care costs There should be a cap on the amount people pay for long term care costs, and people should be able to keep more of their own capital before they are assessed for care fees.In its review, the Government has announced that it is unaffordable to put any cap on the costs of care, due to the cost and the state of the budget deficit. This is unlikely to be introduced as things currently stand.
  2. Deferring care costs There should be an option to defer care costs for those in residential care (thus putting off the costs of care until after death, meaning your house would not need to be sold in the event of care).As an alternative to putting a cap on the costs of care the Government is proposing that no-one will be forced to sell their home if they require care.  Instead, from April 2015, they can defer payments until after their death by taking out a form of loan with interest which will roll up and be paid by their estate on death.  The loan would be secured on the claimant’s house. This will be an unattractive option for many people.

What these proposals show is that successive Governments are unwilling or unable to tackle this issue with any finality, taking a series of short-term measures rather than dealing with the fundamental problems caused by an aging population.

How can financial planning help?

Take a look at our sudden illness case study. This explains how we were able to help a couple who had to deal with the financial implications of a serious illness to the husband, and what we did to secure their finances.

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