It’s a common assumption that the NHS will pay for our long-term care needs. Research by the Local Government Association found as many as 44% of respondents believed this to be the case. But it all depends on the individual circumstances and for many this simply won’t be the case and they will need to pay at least some of their own care costs, if not all.
Unfortunately, long-term social care is the source of many an assumption upheld by a large number of people. In this column, I will be debunking the five most common myths.
I won’t need social care
There is no way to convincingly tell whether or not you’ll need some form of care when you get older. But given the statistics, there is a big chance that you will.
The UK government estimates that, in 2018 (the latest year for which data is available), some 3.5 million of the UK’s 10 million over-65s needed help with one or more daily-living tasks.
As our population ages, the stark reality is that a higher proportion of us are likely to suffer from a limiting illness or disability. Due to this, the UK government predicts a massive increase 5.2 million in 20382 over the coming years.
On average, we’re living longer which means that there is a good chance that most of the 30 and 40-year-olds of today are going to be living well into their 90s. And that increases the likelihood of them needing care.
I won’t need to pay for social care
Under the new care-funding rules to be introduced in England from October 2023, if you have assets of more than £100,000 (including your home), you’ll have to pay the full bill for your own care (and if your assets are between £20,000 and £100,000, you’ll have to pay a proportion of it).
This is capped at £86,000 from October 2023 by the Government, but that’s limited only to the Care component payable by the local authority (LA). It will not apply to the actual amount you end up paying.
The vast majority of people will never hit the cap. And the people who do will pay a significant amount of money before they reach it. The average LA care component costs around £500 per week. This means it will take 172 weeks before someone hits the Cap. (£86,000 divided by £500). This also means that if you are paying £1500 per week for your care that’s £258,000 in care fees before you reach the Cap. Even then you only get a contribution of £500 per week.
Long-term care means living in a care home
Of the roughly 3.5 million over-65s who need some form of support, only around half a million are living in care homes3.
Therefore, the large majority of us who’ll need paid care are likely to remain in our own homes and rely on visits from carers.
For some this may just be an hour or two of help every day with some things around the house and for others the support could be far more involved. Unsurprisingly, there are costs and other implications that come with that.
I will have to sell my home if I need care
This isn’t always necessary. Unless you are receiving care at home, the property will normally be taken into consideration in the financial assessment, but there are lots of different situations where it will be excluded. This is usually when a spouse or partner continues to live in the property, or another eligible relative, which includes anyone over 60, dependant children or a dependant relative with disability issues.
You can also take out a deferred-payment agreement if the property is your only asset. This is when the local authority will pay your care-home fees without the property having to be sold. It will then reclaim the money from the proceeds of the sale of the house after you pass away.
My next of kin will look after my needs
Without a power of attorney in place, no one – not even a spouse or partner – will be able to access your finances or make important decisions about your health and welfare.
A lasting power of attorney, as it’s called in England and Wales (or continuing power of attorney in Scotland or enduring power of attorney in Northern Ireland), is a legal process that allows you to appoint someone else to look after your affairs for you if you’re unable to.
Setting up a power of attorney is an important part of later-life planning. It’s important to consider that it’s not just a question of how you might pay for care, it’s also about the need to move your money around in order to do so.
It’s important to know about the support available to you should yourself or a loved one find themselves needing care. You should never try to do it all yourself as there are so many misconceptions and pitfalls. An expert adviser will help you to map it all out, understand the complexities of the system and work out the best choices for your own circumstances.
*Powers of Attorney involves the referral to a service that is separate and distinct to those offered by St. James’s Place and are not regulated by the Financial Conduct Authority.
If you found Long-term social care – 5 myths exposed helpful, you’ll find more advice on planning for social care costs on out Finance channel.
1 Majority of People Unprepared for Adult Social Care Costs, Local Government Association, October 2018 (Based on a survey sample size of 1,741)
2 Evidence Review for Adult Social Care Reform: Summary Report, UK Government, December 2021
3 Care Home Stats: Number of Settings, Population & Workforce, Carehome.co.uk, May 2021