The typical person entering residential care could face total bills of between £50,000 and £93,000, depending on where they live, according to analysis by Royal London.
Variations in house prices around the UK mean this could amount to anything from 18% to 56% of the value of the average house.
In the recent Budget, Chancellor Philip Hammond announced a new Green Paper on social care would be published later on this year and pledged there would be no ‘death tax’ i.e. no subsequent levies on people’s estates to pay for care during their lifetime.
As announced in 2015, the Government also introduced a lifetime £72,000 cap on care fees, however the cap was delayed until the start of the next parliament in 2020, leading many to believe it has simply been kicked into the long grass and is unlikely to be implemented.
For most people in later life, their family home could potentially be by far the biggest asset on which they will need to draw to meet care costs.
The length of time for which someone stays in a residential home can vary hugely, and for those with the longest stays, the total bill could exceed the value of the typical house across several areas of the UK.
For people in North West, where the average house price at the end of 2016 was just over £150,000, an average stay of 30 months in a local home costing £500 a week would eat up nearly 43% of the value of their home. The total bill would be £64,959.
Mark O’Neill, Director at Jones Harris Chartered Financial Planners said:
“We have an ageing population, with more of our loved ones requiring a long-term care solution. We could potentially see a large part of the value of our family home used in care costs.”
Jones Harris Chartered Financial Planners provide independent financial advice in order for you to make the most of your money in later life and to help ensure you can continue to afford care fees for as long as necessary.
We can now expect to live for twenty or thirty years beyond our selected retirement age, as this happens it becomes more likely that we will need help or specialist care in our later years.
Demographic changes often prevent our relatives from providing this essential support, with many care decisions made as those close to us do not want to become a financial burden on their children.
We work with individuals, solicitors and care homes to provide specialist and independent advice on all aspects of care fees planning and funding long-term care.
Mark O’Neill is a Society of Later Life (SOLLA) Accredited Later Life Adviser. This means he can guide you through the care fees planning choices and options available to you.
For more information or to speak with Mark about your care planning needs, please contact him on 01253 874255 or email: firstname.lastname@example.org.