Labour Scraps Cap on Social Care Costs
The recent general election has resulted in significant changes in social policy. The new chancellor, Rachel Reeves, has now removed the planned cap on social care costs.
This means there is no upper limit to the amount that someone can pay for social care during their lifetime. Because of this, many will find that any future care costs will swallow up the majority of their assets if they don’t act now.
The Financial Reality of Potential Care Costs
- Around one in seven older people will face personal care costs in excess of £100,000 during their lifetime.*
- Home care costs now range between £23 and £34 per hour. So, two hours of home care daily at £30 per hour would amount to approximately £420 per week, or £21,900 annually.
- Residential care costs are even higher, with an average of £800 per week, or £46,600 annually.
If It Sounds Too Good to Be True…
There is no magic pill solution to protecting yourself entirely from care fees. However, couples can take legitimate steps now by creating two bespoke April Wills®, which can mitigate such costs and keep inheritance in the family bloodline. Once a partner passes away or loses mental capacity, it becomes impossible to implement this valuable straightforward planning – a situation that we’ve seen sadly quite often when families contact us for help a little too late.
Local Authorities are well aware of schemes that provide ‘promises’ to shield your home or savings entirely from care or inheritance tax, such as ‘Asset Protection Trusts, ‘ also known as ‘Living Trusts.’ Local Authorities have numerous powers to reverse or ignore these trusts if they deem you have intentionally deprived yourself of assets to avoid care. April King has never offered or endorsed Living Trusts.
By creating two bespoke April Wills®, you can ensure that your property is passed down to your children and grandchildren while still providing for your spouse or partner – but planning like this needs to be done in advance. If care is required, assets will be means-tested by local authorities, potentially reducing your estate to just £14,250 before the Local Authority takes over the fees.
Prevention is Better Than Cure
It’s difficult to predict what the government will do in the future – and the only action you can be sure about is what you do now to protect your legacy in the best way for your circumstances. Part of this is preparing and planning for care costs in advance to legitimately protect as much as possible of your estate and for your family in the future.
You may feel apprehensive; after all, estate planning can seem daunting, but we’re widely renowned for our ability to reassure you with jargon-free advice and clear, tailored solutions. In fact, we’ve been doing this since 1991 and have helped thousands of clients just like you protect what matters most to ensure a positive legacy.
To find out more or to schedule a free initial consultation with one of our friendly estate experts, please get in touch with our team on 0800 788 0500 or request your complimentary information pack using the form here.
*The Department of Health and Social Care
