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Changes to care costs deferred


care bill

A key concern for many of our clients is paying for long term care sometime in the future. Proposals for improvements to the system have been floated but won’t see the light of day for another five years at least. The media would have you believe that this is a definite change to legislation but unfortunately the truth is somewhat less certain than that (there’s a surprise!).

For now, unless your assets fall to less than £23,250 most people will have to pay for all of their own residential care. There’s no upper limit. So it is important to make careful provision for this possibility through savings or insurance. Once your savings fall below £23,250 the local authority begins to contribute towards the costs on a tapered basis. There is some financial support for care at home but this is means tested on your income (by the local authority).

For the future there is the possibility of some good news, some more good news but also a bit of bad news. The government has proposed to raise the asset limit to £118,000 in 2020. That’s good news. More good news is that they also propose a cap of £72,000 on how much you would have to spend. The bad news is that the cap only applies to care costs – not general living expenses. And, to repeat, this is not set in concrete and could change.

Long term care costs are, on average, between £29,000pa and £39,000pa (if nursing care is needed) – more in the South East, less in the North. If the proposals do come into force we will therefore have to pay for the first two years of care ourselves – approximately. In the intervening years the likely worse case scenario is that five years of care needs to be covered – say £150,000.

And then you need to allow for general living expenses on top of that.


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