Care reforms should make us think about how to pay for old age

Old person in wheelchairLong-term care is an emotive subject and there are two main issues. No-one likes to think they're going to get old and need care so we don't plan for it and secondly, we believe the state should keep us in our old age, we don't want to pay for care.
The government tried to tackle the topic last week with the publication of its long-awaited Care and Support White Paper, which was built on the radical, and expensive, proposals of the Dilnott Commission, headed by economist Andrew Dilnot.

However, the government has backed down over implementing Dilnott's plan for a £35,000 cap on care costs for the individuals and an increase in the means-testing threshold for care to £100,000 – currently if you have assets worth over £23,250 then you're not entitled to state help.

The government has said it would liked to have brought in these changes but with a cost of £1.7 billion a year they are just too expensive.

It's a shame that we are in the midst of a recession and the country doesn't have the money, and it's also a shame that the government has put its spin machine to work on long-term care – 'launching' a scheme to provide loans to pay for care that will then be paid from the estate of the person when they die. However, this scheme already exists, the only difference is that from next year people will pay interest on that loan.

The one positive of the care reform, or non-reforms, is that it has put the issue of long-term care in the spotlight. It isn't nice to think about it but it is becoming a reality for an increasing number of people, and many of us will have to think about how we will pay for ourselves and our loved ones.

Research by Just Retirement says that people resent having to use their estate, in other words their homes, to pay for care. Quite often the argument against selling a home to pay for nursing home fees, which are set to hit £33,000 a year by 2025, is 'I've paid my taxes, so the state can pay for me'.

Unfortunately this isn't how it works. When you pay your tax it doesn't go into a pot for your personal use if you become unemployed, when you get old or need care. The cost is borne by current taxpayers and if people opened their eyes to this fact – we may finally see some more sensible planning for old age care.
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