Care costs paid? – might not be quite as good as it seems

According to Inside Housing:

The limit of £72,000 will benefit just 8 per cent of men and 15 per cent of women, a report by the Institute and Faculty of Actuaries has warned.

The cap, announced last year to help people deal with spiralling care costs, could still mean £140,000 is spent before any help is given as it covers direct care costs only.

The establishment of a cap was a bid to tackle the high costs of care, which routinely saw people forced to sell their own homes to meet the fees.

Before its introduction, anyone with assets of more than £23,250 would be expected to fund all of their care, whether in their own house or at a residential home.

The IFoA said that because the cap did not cover accommodation and living expenses – but rather the amount a local authority pays for care – an elderly person could have spent £140,000 before qualifying.

The institute, which is the professional body for actuaries, warned that many people’s pension savings were not enough to cover the cost of elderly care.

Thomas Kenny, one of the authors of the report told the BBC: ‘Anyone who is expecting that the cap will pay for care is in for a shock. The cap is there to protect against catastrophic care costs and we estimate that few people entering care aged 85 years will reach it.’

But a Department of Health spokesperson said the current system meant people with more than £23,250 ‘are literally on their own and many have to sell their homes in a time of crisis to pay for the care they need’.

‘We are introducing the first ever cap on care which will protect people from catastrophic care costs and deferred payments so no one should be forced to sell their home in their lifetime to pay for care,’ the spokesperson said.

‘On top of this we have increased the means-testing level so that government help kicks in far earlier than before, meaning two-thirds of people who reach the cap will pay less than £72,000.’