The government has now released the details (17/11/21) of the proposed cap on care costs at £86,000.
The new policy was launched a few months ago with a fanfare about protecting the elderly from the increasing costs of care and the introduction of the new increase in National Insurance to fund social care. But it seems that the details are not quite as good as the headlines.
The detailed proposals make it clear that qualifying care costs are those costs associated with personal care only. They do not include daily living costs, which covers food and accommodation in care homes. The government has however set a cap on these daily living costs at £200 per week. This is helpful because it makes the calculations easier to make. But it does eat into a pensioners savings.
If care costs are £800 per week for example, then only £600 will count towards the £86,000 care costs cap. That means that whereas it might have taken someone 108 weeks to reach the cap, at £800 a week, it will actually take 143 weeks because only £600 a week will count towards the care cap. That means at these example rates an individual in care would pay £114,400 towards their care before they hit the £86,000 cap, based the personal care element alone.
Not quite what the headlines led us to believe.
Mitigating the costs of care can be achieved of course through professional financial planning, as long as the “Trust Inheritance” plans are put in place early enough for them to take effect. Once you are in care or have a likely impending requirement for care its too late to mitigate the costs.
For more information about the costs of care and in particular for advice about NHS Continuing Healthcare Funding have at look at either of these websites www.farleydwek.com or www.caretobedifferent.co.uk
For more information about Long term Care planning speak to one of our expert financial advisers.