The future of self-funded care

With the general election fast approaching and the launch of party manifestos, we have seen a renewed interest in social care and the ongoing debate on its funding.

First came Labour, who revealed that it would introduce a ‘National Care Service’, promising an additional £8bn for social care over the lifetime of the next Parliament. The manifesto also pledged to increase the Carer’s Allowance for unpaid full-time carers, bringing it in line with Jobseeker’s Allowance.

This was swiftly followed by the Conservative’s manifesto announcement, which revealed plans for all care costs to be assessed against an individual’s total assets, including their home, subject to a floor of £100,000 that would be left untouched. For the first time, we are seeing a proposal for a majority of people to contribute to care costs, whether home-based or in a residential or nursing home. (At present, the value of someone’s home is not included in the £23,250 of assets someone can have before they lose the right to free care at home.)

The Conservative’s proposal indicates a shift in policy away from previous plans to raise council tax, and towards a model of care that relies on self-funding, even if many don’t end up paying the full amount until after they die. Many people who were previously intending to rely on the State to fund care will now need to consider how or if they pay for care at home.

Moving mountains to fund care

If we accept the assumption that Government now expects more people to fund their own care, we should also be asking what schemes, if any, it plans to create to help people achieve this.

One option would be an arrangement similar to a stakeholder pension, whereby people are mandated to set aside a minimum proportion of their income each month. The money would be allocated to a fund which would be set aside exclusively for their care needs in later life.

An alternative and more flexible policy would be to facilitate the creation of private care funds with significant tax incentives, similar to ISAs. The Government has adopted a similar policy in its attempts to support first-time homebuyers, and it would therefore make sense to adopt similar savings incentives for older age.

Whatever financial scheme is put in place the fact remains that a seismic shift in public attitude is going to be required. At present, a majority of people believe they are entitled to high quality State-funded care, a legacy of the NHS’ universal healthcare principle. The unfortunate reality is that as demand for care services continues to rise, so will the financial pressures on this unsustainable model. The change towards contributing towards our care is gaining momentum. The question is: how to make the unpalatable more palatable?

We are here to take your call and will provide impartial support and guidance – contact our friendly care experts today to discuss your care needs.

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