Flexibility is key
It’s no secret that the UK population is ageing. The Office for National Statistics (ONS) projects that more than 24% of people living in the UK will be aged 65 or older by 2042, up from 18% in 20161.
Together with an ageing population, changes in legislation and increasing care costs, it’s more important than ever to consider planning for long-term care to protect yourself and your family.
Will the government support me?
The way care is funded works differently across the UK.
In England and Northern Ireland the situation depends on how much capital you have:
- Less than £14,250: you will be entitled to support from the local authority. You won’t have to contribute from your capital, but you will be expected to contribute from your income. Third party top ups will be required to pay care costs which are above the local tariff rate.
- More than £14,250, but less than £23,250: you are required to contribute towards the cost of your care at a rate of £1 for every £250 of savings between £14,250 and £23,250. This is known as ‘tariff income’.
- More than £23,250: you will have to pay the full cost of your care.
In Scotland, the capital limits are as follows:
- Less than £18,000: you will be entitled to maximum support from the local authority. You won’t have to contribute from your capital, but you will be expected to contribute from your income.
- More than £18,000, but less than £28,750: you are required to contribute towards the cost of your care at a rate of £1 for every £250 of savings between £18,000 and £28,750.
- More than £28,750: you will have to pay the full cost of your care. If you have less than £28,750 in capital, but a weekly income considered to be high enough to cover the cost of your care, you will have to pay all of your fees.
If you live in Wales, The capital limit varies depending on whether you’re paying for non-residential or residential care and is £24,000 and £50,000 respectively.
What is included in the means test?
Most assets and savings are included in the means test, but your home will be excluded if:
- Your spouse lives in the property
- A disabled relative lives in the property
- A relative over 60 lives in the property
- A child under 16 lives in the property
- The person is in the first 12 weeks of needing permanent care
- Care is temporary
Can I give my property away?
There is no time limit for the Local Authority to question any transfer of property to establish whether the motive for transferring may have been to exclude the property from the means test.
What are the costs of long-term care?
Costs are very different depending on whether you receive care in your own home or in a care home and also depend on how much support you need.
According to a report by healthcare specialists LaingBuisson in 20182, care home costs can range from:
- £27,000 to £39,000 per year for a residential care home,
or
- £35,000 to £55,000 per year if nursing is required
These costs may not include things like day trips, hairdressing etc, so it’s important to check exactly what is included.
Is a cap on care costs being introduced?
Following the Care Act 2014, a cap on care costs was due to be introduced from April 2016. However, this was then postponed to April 2020 and is now pending the publishing of a Government Green Paper where a figure of £86,000 is mentioned. Quite what that will mean in practice is far from clear.
The financial impact on the govenment’s plans for taxation and spending on social care are colossal so it may be years before we have even a glimmer of clarity.
While it is impossible to plan with any certainty, flexibility in your arrangements is probably the right response to what may be a huge financial burden.
We can help you consider and make sensible choices.