Chancellor Rachel Reeves has scrapped the planned cap on long term care costs, to help tackle the the ‘black hole’ in UK finances the new Government claims was left by the Conservatives. This leaves individuals at risk of paying ‘catastrophic care costs’ says provider.
Successive governments have kicked the social care funding can down the road but the Government has now said the reforms, due to be implemented in October 2025, have been scrapped, which will save around £1.1billion in 2025-26.
Top level benefits of the implementations would have seen an £86,000 cap on people’s lifetime liabilities for their personal care and the upper capital threshold, above which people are charged for their care, raised from £23,500 to £100,000, allowing many more people to claim state-funded support. The lower capital threshold, below which people make no contribution to their care from their assets, would have risen from £14,250 to £20,000. Both of these thresholds have been frozen since 2010.
Aegon has consistently urged the Government to press ahead with social care funding as an urgent issue for some of the most vulnerable in society. Commenting on the recent announcement, Steven Cameron, pensions director at Aegon, said: “The announcement that the government will not be taking forward the previous government’s deal on social care funding will be a bitter blow to those facing unlimited bills for adult social care. Social care funding is a major concern to millions of families but had been noticeably absent from the Government’s election manifesto and the King’s Speech.
“Cancelling the deal, which was to have started in October 2025, means individuals will no longer have their contributions towards eligible care costs capped at £86,000. Instead, as currently, those requiring care for longer periods face catastrophic care costs which can wipe out a lifetime of savings.
“Had the new funding deal been introduced, individuals would have been able to plan for the eventuality of needing to pay for care. But unfortunately, as now, those who’ve done the right thing and saved for their later life could see it all – and their family home – disappear to pay for care, destroying plans to leave an inheritance to loved ones.
“With people on average living longer, the challenge of social care funding is likely to get worse. While the nation’s finances may be stretched, we do hope the government will look again at what can be done to strike a fair funding deal between individuals and the state.”
Main image: andreea-popa-tmEUmG9K2r0-unsplash
