One of the South West’s only Society of Later Life Advisers (SOLLA), Dave Robinson, from leading regional accountancy firm Albert Goodman, welcomes these amendments, considering it a step in the right direction, but is warning against hidden catches.
Robinson comments, “The changes to social care funding show the Government is making efforts to support the public at face value. However, many thousands will not benefit.
“Currently, the Government will contribute to care fees when accessible capital is below £23,250 and will pay the full bill if this is less than £14,250. The cap comes into place in 2017, when individuals who have more than £123,000 in accessible capital and have spent more than £75,000 on personal care costs. It is important to note that food and lodging costs - so-called hotel costs - are not included in this cap and the costs will not be backdated, therefore, financial support may not be given for many years.”
The rate at which costs are accrued towards the threshold will be based upon the Local Authority Rate and this averages at around £27,872 per annum. The Government will assume hotel costs average £12,000 per year, therefore £15,872 will be put towards the cap. Meaning, on average, the cap will not benefit individuals until they have been in care for more than four and a half years.
Robinson continues, “Findings from a recent BUPA report suggest the average stay in a care home is 801 days, therefore when compared to the average input from the local authorities, the individual is likely to have passed away before the Government provides financial support. Similarly, the Sunday Times recently published that the Government only expects to support 16 per cent of individuals paying for personal care.
“The change does provide piece of mind for those going into care and strongly highlights the need to carefully consider all the options to ensure financial security later in life. There is a lot of help and advice available and families should investigate all options before making important financial decisions.”
Albert Goodman specialises in later-life financial planning and is the most equipped firm in the South West to offer advice, with three SOLLA advisors within its offices – more than any other firm, regionally. Albert Goodman has offices across the region including Taunton, Chard, Yeovil, Bridgwater, Weston-super-