Funding for long-term care
A solution for funding social care in England remains many years away.
“Time and again, governments have stepped back from reform when faced with the cost. Too much emphasis is put on the cost of change and not enough consideration is given to the human and financial cost of no or incremental change.”
Those words are from the report, Adult Social Care Reform: the cost of inaction issued by the House of Commons Health and Social Care Committee in early May. The timing was somewhat ironic as three days before – on the Friday before the early May bank holiday – the government had published the terms of reference for an independent commission into adult social care in England, to be chaired by Baroness Louise Casey.
The commission had been announced in early January, six months after the Chancellor abandoned a plan for a long-term-care funding cap in England which had been due to start in October 2025. The cancellation drew little attention, as the media spotlight was on the Winter Fuel Allowance cut, announced at the same time. In practice there had been some expectation that the capped funding plan would not go ahead. Its commencement had already been deferred several times since being legislated for in 2014.
A distant prospect
The terms of reference for the new care commission were surprisingly brief, but buried in them was the statement that the first phase, due to report in 2026, “…should produce tangible, pragmatic recommendations that can be implemented in a phased way over a decade.” In other words – not spelt out – a scheme that had been set to start later this year is to be replaced by a new structure that will not be fully operational until 2036 – at least two general elections away.
Until the Casey commission’s plan begins, England will be left with a long-term-care funding system which many earlier investigations (including a royal commission at the turn of the century) has said needs reform. The current rules broadly mean that anyone in England with capital of over £23,250 (unchanged since 2010/11) must meet their own long-term-care costs in full.
There is currently no insurance policy available to protect against such future costs. If potential care home fees concern you, the best approach today is to ensure your financial plan makes allowances for the possibility of care costs. This forms part of each personalised plan we build with a client and we can help provide clarity on the financial impact the cost of long term care may have on your long term financial objectives.
