Cap On Care Costs Will Not Prevent Older People Losing Their Life Savings And Homes

New research commissioned by the older people’s charity Independent Age shows that over half (51%) of homeowners in England over the age of 50 fear losing their savings and homes to pay for their care in the future. The results suggest that 58% of English adults and 56% of homeowners aged 50 and over worry about this, but less than a quarter (22%) are saving for their future care needs.

The polling by YouGov showed that women homeowners aged 50 and over were more concerned about losing their home than men (62% v 50%). Overall, people in the Midlands were the most concerned (61%). Currently, more than 143,000 older people – more than a third of the 421,000 currently in residential care – are likely to face costs of £100,000 or more to pay for their care. Such costs are classed as ‘catastrophic’.

In recent years, the government has proposed introducing a cap to prevent these catastrophic costs. However, separate research by Grant Thornton UK LLP, commissioned by Independent Age, has revealed that a cap would fail the majority of older people in care homes. Caps don’t work because:

• If the cap is set at too high a level, many older people in residential care will not live long enough to reach it – the average length of stay in a care home is 22 months.
• Most of the proposed caps take no account of hotel costs – food, lodging and other non-care related costs – and therefore leave many older people at risk of catastrophic hotel costs.

The research shows that:

• A cap set at £100,000 of care costs only affects 5% of people and is only relevant after 8.5 years in care
• A £72,000 cap on care costs only affects 12% of people  and is only relevant after 6.1 years in care
• A cap of £35,000 on care costs only affects 36% of people and is only relevant after 3 years in care
• Even a £100,000 cap that includes both care and hotel costs only affects 34% of people in residential care and is only relevant after 3.1 years in care

Independent Age is calling on the government to scrap the idea of a cap and instead introduce free personal care for older people, as enjoyed in Scotland. The charity states that this would virtually eliminate catastrophic costs (2) and give every older person the right to free personal care. The benefits would include:

• A reduced cost of care to individuals, families and demand for high cost residential care
• significantly reducing unmet care needs
• supporting more people to be cared for in their own home
• reducing pressures on the NHS
• providing much needed support to family carers

George McNamara, Director of Policy and Influencing at Independent Age, commented:

“If the government is serious about protecting older people from having to sell their homes or lose their hard earned savings then it’s time for them to scrap the idea of a cap.

“Catastrophic costs may not be a term used by many older people, but we know that many have an ever-present fear of losing their life savings or homes to pay for their care. The government has a duty and responsibility to act.

“Free personal care, in contrast to the proposed caps, will end the worry of losing everything to fund care.  It’s simple, fair and affordable and is the reform that the majority of people want to see.”