IN THE BACK
/ PLATFORMS /
WHO CARES?
John Blowers finds out how to fund the cost
of long-term ill-health in retirement
E
VERY SILVER-LINING
HAS A CLOUD and
one side-effect of
longer lifespans is
spending our final
years in need of long-term care.
Advances in medicine are reducing
death from cancer and heart-related
illnesses, but this has led to a
prevalence of other maladies such
as dementia and Alzheimer’s which
require long-term care.
You could be looking at between
£30,000 and £50,000 a year in fees
if you require 24-hour care and
most people simply don’t have the
resources to pay for this. However,
if you have assets such as a pension
or property, the government is
looking to pass the cost of this care
on to individuals.
UNCOMFORTABLE
LIFESTYLE
We also need to accept that, if
you have saved enough to fund a
comfortable lifestyle in retirement–
including holidays, cars, golf and
so on – and become incapacitated
with a long-term illness, it is
unlikely you’ll still be jetting off to
the sun or playing 18 holes every
day. This means your costs while
you are healthy may be similar to
those you incur for long-term care.
This is not a political rant, so
let’s look at the facts. As we have
an ageing population, there are
increasing demands on our NHS
and there isn’t a bottomless pit of
cash to fund it without increasing
taxation. Few investors want that.
So, this money has to come from
somewhere.
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DIFFICULT DECISIONS
Theresa May said she wanted
to be honest about the “difficult
decisions” the country faces when
she unveiled a plan to make older
people and their families pay more
of the costs of long-term care.
She plans to expand the current
system of charging for those being
cared for in residential homes to
those who are being cared for in
their own homes. People currently
being looked after in residential
homes must pay for their care if
they have assets worth more than
£23,250, including property.
The thinking behind this is
mainly practical. The person
affected must leave their home to
obtain the required care, which is
expensive. This justifies the forced
sale of the main residence. Under
the scheme, thousands of people
are forced to sell their homes every
month to pay for residential care.
People able to stay in their home
receive domiciliary care. Until now
they had to pay if their savings
totalled more than £23,250,
excluding property.
Care is free when total savings
fall below a lower limit of £14,250
with a sliding scale of contributions
towards care costs between the
lower and higher limits.
Under the new scheme, those
people who use residential and
domiciliary care will face the same
charging structure. They will be
assessed to obtain a picture of their
finances and if their combined
savings and property are valued at
more than £100,000, they will need
to pay for their care.
UPON DEATH
If they want to hang on to their
home, they can defer payment.
The state will deduct the cost
from their estate when they die.
Local authorities already offer
a Deferred Payment Agreement
(DPA) which allows people to
secure care fees against their home
once it is sold, which can take
place upon their death, or sooner,
if they choose. The cost includes
interest payments charged by the
council.
The House of Commons library
noted in March that the adult
population grew by 10 per cent
between 2001 and 2011, but the
number of adults aged over 65
grew 11 per cent and those aged
over 85 rose 24 per cent in the
same period. People aged over 85
are most likely to need care. A
report by King’s College London
said the number of people dying
from dementia is expected to rise
from 59,000 in 2014 to 219,000 in
2040.
It is not clear whether an interest
rate will be applied to charges if
payment is delayed until death,
nor how care will be provided
when it is largely carried out
by foreign-born labour and
the manifesto pledges to
cut immigration to tens
of thousands. It is also
not clear how people
receiving care will
be protected from
over-charging
by private
domiciliary
care
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