Future cap on care costs: Do I still need to protect my wealth?

What are the current rules?

To have residential care paid for by your Local Authority, you must have savings and assets – which may include your home – worth less than £23,250. Below that, the amount you pay reduces until you have less than £14,250, at which point the Local Authority pays for your care if you qualify. Unfortunately, this often leaves individuals exposed to very high and unpredictable care costs and facing the prospect of losing the majority of their income and assets.

In an attempt to improve this, the government has announced that from 2023 no one in England will pay more than £86,000 in care fees during their lifetime.

What is a cap on care costs?

The cap on care costs is the maximum contribution that anyone may need to make towards their care costs over their lifetime. Under the government’s new cap, from October 2023:

• those with assets of less than £20,000 will not have to pay towards care fees – although they might have to pay from their income
• those with more than £100,000 in assets will not get any financial help
• those with assets between £20,000 and £100,000 will qualify for help, but will have to pay £86,000 out of their own pocket to reach the cap

What will and will not count towards the cap?

Whilst the cap will cover fees for personal care, like help with washing and dressing, it will not cover living costs such as care home fees, food or utility bills. Furthermore, the government has confirmed that top up payments will not count (where the person or a third party chooses to make additional payments for a preferred choice of accommodation or care arrangements).

What are the criticisms of the cap?

The cap has been criticised as being a regressive step that will leave people with low levels of wealth still exposed to very high care costs. For example, if you own a property worth £100,000, this could still be forced to be sold to fund your care, leaving your family with as little as £20,000 in inheritance! There is also an argument that the new rules will hit people in regions of the country with lower house prices harder than it does those in regions with higher house prices.

Should I still be worried about care fees?

Despite the new cap, you could still be forced to sell your home to pay for care fees.

If you want to safeguard your future and ensure that the cost of your long-term care is covered, it is vital that you speak to an experienced solicitor who can advise you on the specifics of your financial situation and offer bespoke advice.

To have a no obligation chat with one of our Solicitors, please feel free to call 0161 509 5020 or email enquiries@privateclientsolicitors.co.uk.