Today, the government announced the first-ever cap on the costs people can be expected to pay for care in later life.
One in five older people currently pay costs of over £75k for this care and at present, up to 40,000 people every year are forced into selling their homes because they face unlimited care bills. Many people who are approaching older age are uncertain about what costs they will incur and how they will cover them.
This makes it difficult to plan ahead financially as people don't know how big their care bill could be and how much they can leave for their children after this care bill has been paid.
Today's announcement will give people much more certainty and help alleviate the fear that their home, or other assets they have worked hard for, may need to be sold to cover care costs. From 2017, no-one will have to pay more than £75,000 toward the cost of their care. If a person care costs are over £75,000, their local authority will cover them.
The Government will also significantly increase the amount of assets a person can hold whilst being eligible to receive financial support for their residential care home costs. Currently the Government only pays care costs for people whose assets are worth less than £23,000. From April 2017, the threshold will be increased so that those with assets worth £123,000 or less, will all receive some degree of financial support for their care costs. People with the fewest assets will receive the most support. This will, for the first time, provide financial protection for those with modest wealth, while ensuring that the poorest continue to have all or the majority of their costs paid.
A combination of the cap and the rise in the threshold for means-tested support will help an extra 100,000 less well-off people who, under the current system, would not receive any support with their care costs.
Secretary of State for Health, Jeremy Hunt, said of the reforms:
"We want our country to be one of the best places in the world to grow old. Everyone will benefit from the peace of mind that these changes will bring and, by 2025, up to 100,000 more older people will receive financial support with their care costs as a result. These plans will give certainty about the cost of care, making sure we can all get the support we need without facing unlimited costs, whilst also ensuring the most support goes to those in greatest need."