Pensioners face having to sell their homes
The warning signals a “culture shift” in policy to make people realise they will have to foot the bill for their care in later life rather than relying on the state. A senior government source said the principle responsibility for looking after people when they are frail and elderly will be “themselves, their own finances and assets”.
In 2015, the Conservative Party fought the General Election with a key manifesto commitment to introduce new rules designed to prevent older people from having to sell their homes when they go into care. However, within weeks of winning an outright majority, the Conservatives announced that the introduction of a lifetime cap on care costs in England – which was set at £72,000 for people above state pension age – was being deferred until 2020.
Now fresh doubt has been cast over whether the cap will ever come into force. The source said that the social care system was different to the free -at-point-of-delivery NHS.
We need to start thinking as a society about how we deal with care of our own parents
They said: “One of the first things in terms of a culture shift is making sure it is thoroughly understood.” They said people needed to realise that the responsibility for their care in old age principally lay with “themselves, their own finances and their own assets”.
“There needs to be greater awareness and a culture of personal responsibility, a sense that I do need to save, I do need to be in a strong position,” they said. “The next generation of patients will be a group who have been in the strongest position we have ever had in terms of their own resources.
“They will have been the generation that has benefited from a strong housing market and from pension schemes.” The comments come after care minister David Mowat said parents should have as much of a responsibility to care for their elderly mothers and fathers as they do for their own children.
Fresh doubt has been cast over whether the cap will ever come into force
He told MPs on the Local Government Select Committee last month: “We need to start thinking as a society about how we deal with care of our own parents. “Nobody ever questions the fact that we look after our children.
“Nobody ever says it’s a caring responsibility, it’s just what you do. “Some of that logic, in terms of the volume of numbers that we are seeing coming down the track, will have to impinge on the way we think about how we look after our parents.”
Last year it was revealed that Theresa May’s policy chief had suggested that people with valuable homes, who face high social care costs in old age, should downsize or re-mortgage to cover their bills. Director of policy John Godfrey has suggested that over the next 10 years the solution to the social care crisis lies in people selling up or releasing equity in their property.
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Theresa May's policy chief suggested that people with valuable homes downsize or re-mortgage
“On a 10-year view, equity release is going to be hugely important,” he told an independent commission in 2015. “If you look at the amount of housing equity across the UK owned by people of post-retirement age, that is where an awful lot of the money sits at the moment.”
One in 10 people pay more than £100,000 in care costs in old age, research has shown. Equity release involves borrowing against the value of a home or selling all or part of it in exchange for a lump sum or a monthly income. Mr Godfrey said he believed the Government should encourage people to sell their homes to release cash through the building of suitable retirement homes.
Last week the Government faced calls to offer the public an incentive to save for long-term care costs. Lord Warner, who sits on the Lords’ Select Committee examining the sustainability of the NHS, said: “If you’re not prepared to do it [fund care costs] out of general taxation, which is one option for the Government, then you’ve got to think of some kind of insurance basis with some degree of pooled risk.”
One in 10 people pay more than £100,000 in care costs in old age
Germany introduced a mandatory insurance system for long-term care in 1995 to cover people not able to live independently for longer than six months. Japan has a similar social insurance system.
Lord Warner said both models offered examples for the UK. At present, people can insure against future costs by taking out an immediate care annuity, a single-premium product that pays out an income once the holder is deemed to be incapable and in need of care.
However, Baroness Altmann, former pensions minister, has called on the Government to launch a specific “Care Isa” that would encourage people to save for the eventuality of needing long-term care. Last week it was revealed that millions of families will face a five per cent hike in council tax to help bridge an estimated £2.6billion black hole in social care funding.