Thursday, 14 February 2013

Care in old age...

There are sometimes contentious and difficult long term challenges that governments must face up to even though delay and postponement feels a lot easier. Working out how we fund care in old age is one of those issues. It has been talked about for many years but previous governments have always been reluctant to act.

By 2030, the number of people aged over 85 will double, and the number of people with dementia will exceed one million. As the number of older people with such long term conditions increases, we need to become a society where people prepare and plan for their social care costs as much as they prepare and plan for their pension.

Earlier this week, the government announced a new package of support for the elderly to help them pay for their long-term care costs. At the moment, many older people and people with disabilities face paying the limitless, often ruinous costs of their care with little or no assistance from the state. While those with assets of less than £23,250 do receive support, those with assets above this level receive nothing at all.

This is desperately unfair, particularly for those who have worked hard all their lives to pay off their mortgage, to save for their future or to have something to pass on to their loved ones – only to see their property sold and their savings wiped out and it happens to more than 30,000 people a year. The current system doesn’t exactly encourage people to provide for themselves or save for their retirement.

The crucial part of the new package is a huge increase in the threshold of savings below which the government will help to fund the cost of care. The Government will step in earlier to pay a proportion of residential care costs, with the threshold more than quadrupled – from £23,250 to £123,000. This will still help those of modest means the most but will also ensure that those who have saved for their old age get some support. There will also be a new maximum cap of £75,000 that any individual would have to pay in old age. This will encourage the development of affordable insurance schemes which some people might opt in to in order to protect their savings.

The new approach is expected to directly benefit an extra 100,000 people who would not receive support under the current system but the vast majority of state support will be provided to the 40% of older people with the lowest income and wealth. The plans are a welcome step towards giving people some peace of mind about the cost of care in old age.

George Eustice can be contacted at or 1 Trevenson Street, Camborne, Cornwall TR14 8JD or by telephone on 020 72197032.