In the summer of 2021, The Government announced changes to how an individual’s care could be funded. In her latest article, Ann Baguley DipPFS, our specialist in care fees planning, explains what the changes will mean for you. 

The Government has announced that no-one will pay more than £86,000 for their care costs during their lifetime for care either at home or in a care home. The reality is as ever different from the headlines. The proposals are expected to be modelled on the Care Act 2014, which was never fully implemented.

So what can you expect?

The proposals are in two parts – first the Care fees cap or £86,000

  1. Nothing will happen until 2023. Counting towards the fee cap will not begin until then, so this is no help to those currently receiving care.
  2. The cap only applies to Care costs and not the full cost of care. It does not include the costs associated with providing accommodation and food – so called ‘Hotel’ costs. The more expensive the care home, the higher these hotel costs.  The real level of counting towards the cap is expected to be between £16,000 and £20,000 a year.  It could therefore take 5 years to reach the cap.
  3. Only those deemed eligible by the Local Authority will even be counted towards the cap. At present less than 50% of those applying for Local Authority assistance are granted it and by no means all of them will be eligible for the cap. The process as written in law in the Care Act 2015 would only apply to those with higher levels of need who are likely to have shorter life expectancies. Estimates from 2016 suggested that only 11% of those needing care would ever reach the care fees cap.

Second, the means test threshold – this is increasing from the current £23,250 to £100,000.  You would still have to contribute much of your income to the Local Authority and pay any ‘top-up’ costs out of capital. Capital would though decrease more slowly than at present.

With the changes creating further confusion and uncertainty for many families, should you wish to discuss any aspect of care funding, please contact our Long Term Care specialist, Ann Baguley on 01564 795 997.