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Long Term Care Costs

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Dilnot Commission on Funding of Care and Support.

The report of the commission, led by economist Andrew Dilnot, was published on 4th July. One of the key recommendations is a cap, suggested to be £35,000 on the sum that anyone can be required to contribute towards their care costs. Another is a significant increase in the threshold at which means-tested support is removed: it would go up from £23,250 to £100,000. Subject to those safeguards the emphasis is on individuals taking responsibility for their own care costs.

The Prime Minister has welcomed the report but the cost of implementation would be very high and rising as the population ages. It is hard to imagine that the recommendations would be adopted fully in the short term. The decision to do so would inevitably mean further tax rises or further cuts elsewhere in public spending. It may be that the figures proposed by Andrew Dilnot are seen as being unaffordable at the present time.

What is needed in this area is some clarity, certainty and fairness. That would enable people to make their own plans. The present system is flawed and unfair. It is inconsistent. It also acts as a disincentive to people to save as prudence may lead simply to loss of means-tested benefits. Change is certainly needed. Successive governments have failed to grasp the nettle. The previous government, for example, took ten years to bring forward proposals following the report of the Royal Commission on Long-Term Care in 1999. In the current economic climate the Coalition government will probably not be in a hurry to embrace these additional costs.

In the meantime, those facing the expense of meeting care costs may wish to consider capping the costs by taking out an Immediate Care plan. This gives certainty and the comfort of knowing both that costs can be met into the future and that the balance of the estate may be available to pass on to the family or other beneficiaries.