The harsh reality of paying for social care

In 2014, NFU Mutual published the findings of a survey they had conducted regarding long-term care fees. The survey concluded that care home costs were leaving 75% of us without an inheritance as thousands of people were seeing their parents’ savings and property values drain away in order to fund their social care.

The report also concluded that in the previous five years, a total of one million homes had been sold to pay for long-term care costs. That works out at 200,000 per year or, if those figures are correct, one every 2.6 minutes. So that means that, according to the research, between 2009 and 2014 someone’s home was sold to pay for their long-term care costs just over EVERY 2 ½ minutes!

As it stands today, anyone with assets above £23,250 – INCLUDING the value of their home – will need to pay the FULL cost of their social care, and only when those assets are depleted to just £13,250 do the local authority then step in and pay the full amount. As of today, there is no cap either on the amount that one can pay.

Statistics also reveal that, on average, one in three women, and one in four men, will need some form of residential care. The figures are, indeed, truly scary. Care homes in the Home Counties urgently cost anywhere between £850 and £1,300 per WEEK. So, if we assume an average of £60,000 per year, per person, you can see instantly how very quickly an estate can be decimated by these fees.

Naturally, many people look for ways to mitigate these costs should they need care in the future. But this area is complex and doing one thing may have a detrimental affect elsewhere or may create unforeseen consequences. Many just assume that they can give their assets away, but you need to be very careful of something called Deliberate Deprivation which, in some circumstances, means that what you had hoped to happen, doesn’t.

There is much you can do that will not work and/or is unlawful, but there are also steps that you can take that are far more likely to work, so you need to proceed with caution and take proper legal advice. Prior Knowledge is an Estate Planners based in Epping, but have clients nationally and we are specialists in this field.

We are able to give a free, non-obligatory assessment and consultation in order to advise on the best way forward for you and your family.