Why we're failing the elderly

19 July 2012

Spearheaded by the Secretary of State for Health, Andrew Lansley, the White Paper revealed little of real interest, or indeed benefit, to anyone in need of long-term care, despite the fact that the problem is a ticking time bomb as the population grows older and, unfortunately, lives for longer in ill health.

The problem with long-term care is that it can be extortionately expensive, which means many people end up selling their homes and depleting all their savings to cope with the bills.

Despite this, the only headline-grabbing announcement the White Paper contained was that pensioners in need of long-term care might be able to defer their bill until after they've died.

It would work by allowing old people moving into care homes to borrow money from the government to cover their fees, which would then be recovered from their homes after they've passed away.

However, the 'pay-when-you-die' loan, which will be introduced in 2015, will hardly provide a solution to the problem. It will simply defer it.

Firstly, it's no better than existing schemes such as equity release or getting a loan from your local council.

Secondly, relatives will also have to pay interest on the loan, but the exact details on how much won't be released until 2013 or 2014. Critics have coined it a "death tax" and I agree.

Lack of commitment

But what annoyed me the most was the complete failure to make any real commitment to solve the longterm care crisis. Instead, it simply knocked back the two main proposals set out by the Commission on Funding of Care and Support, set up by the coalition, with a 'we will look at these issues later' excuse.

The first proposal was to look at increasing the threshold at which people lose their means-tested support. At the moment, anyone with assets above £23,250, including their home, is not eligible for any help with their long-term care costs.

The second was to introduce a cap on the lifetime care costs people face, so they won't have to pay open-ended bills that could run into tens of thousands of pounds.

The White Paper failed to address both these points. This means those who have scrimped and saved all their lives to put away a bit more for their retirement will continue to remain at risk of losing everything they've built up (unless they put themselves into a wheelie bin, as one Moneywise reader said he might do), while those who haven't got any assets will receive free care.

With the average cost of nursing home care at around £26,000, any savings can quickly be depleted.

Worryingly, insurance provider LV='s recent Future of Long-Term Care report shows the number of people using this care service will grow from 840,184 today to 1.1 million by 2025 - an increase of 37%.

The report also predicted the average cost per person will rise by £7,000 to £33,000 a year in real terms by 2025, an increase of 27%.

The government agrees capped costs and an extended means test "would be the right basis for any new funding model", but its vague response is that it will "explore these issues further".

Perhaps it's hoping that it will be the responsibility of another government to pick up the slack. Either way, for elderly people needing care now and for the families supporting them, this is simply not good enough.

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