Setting care cap too high will stop us saving, say over 50s

6 June 2017

Over 50s are willing to pay towards the cost of social care, but if the government expects them to pay too much, it will discourage them from saving.

According to a survey from Saga Money, a third of over 50s said that if they had to pay for social care, down to their last £100,000 – as proposed by the Conservatives in their manifesto – it would deter them from saving and making preparations for their future.



Nine out of 10 over 50s said that there should be a care cap to limit the amounts people would have to pay towards their own care, with survey respondents agreeing that this should be set at around the £60,000 mark.

Under the current system a means test applies, whereby people needing residential care have to meet the costs themselves if they have capital and income above £23,250. By contrast if the Conservatives are re-elected they will introduce a new system where people pay for their own care until they only have £100,000 left.

Critics attacked the so-called ‘dementia tax’ because, for the first time, the value of a person’s home would be taken into account for home-based care, not just residential care. They also pointed out that that those living in pricier parts of the UK, who have seen the value of their homes rise considerably – would pay more than those in other parts of the country. The proposal was therefore quickly followed by an announcement that a care cap will be introduced to limit the amounts people are expected to pay. However, Theresa May said the government would need a consultation on what the cap should be.



‘Cap level could stop people building wealth for future’

Commenting on the findings of the Saga Money survey, managing director, Nici Audhlam-Gardiner said: “The survey clearly shows that people are supportive of contributing to their own care, but not at any price.  People find it grossly unfair that some people get all costs funded by the state, whilst others are faced with losing a huge part of the estate they have worked hard to build up.  

 “They strongly believe there should be a cap on care fees and that this should be set at around £60,000.  If the Government sets the cap too high or the floor too low then people of all ages are saying that this would put them off building wealth for the future.

 “The concept of selling the family home before or after death to pay for care does not sit well with three quarters of people, but it is not just homeowners looking to protect their inheritance that feel this way.  A similar number of people in rented accommodation also said that this concept was not right.  Clearly we need to find a sustainable solution to our care funding crisis. However, without a realistic care cap in place, the move risks having the opposite effect with people choosing to spend now rather than buying their homes or saving for later life - leaving the state to pick up an even bigger bill for the future!”




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