Andy Burnham has big plans to solve social care but it won’t be easy (Image: Getty)
Politicians have been promising change for almost 30 years, but the issue remains stubbornly unresolved. Burnham wants to accelerate the work of the Casey Commission, which is examining the future of social care. But history suggests there’s no guarantee its proposals will actually become policy. Sarah Coles, head of personal finance at AJ Bell, said: “Andy Burnham has pledged to grasp the nettle on social care. However, this reform has been just around the corner for almost 30 years: Tony Blair told the Labour Party Conference in 1997 that it needed to be addressed urgently. So while we can hope for swift change, it also makes sense to have a safety net of our own, just in case.”
More than 20 social care commissions, inquiries and white papers have followed since 1997. Proposals have included free personal care and lifetime caps on care costs, but governments have repeatedly postponed or abandoned reform because of the enormous cost. “It’s clear that any solution will need some kind of cross-party consensus, but this has proven elusive for so long,” Coles said.
The current means test in England is also based on thresholds frozen since 2010. Anyone with assets below £14,250 has their care costs covered, while those with assets between £14,250 and £23,250 receive some support. For now, Coles says it’s worth preparing for the possibility that you’ll still have to fund care yourself.
She advised: “If you’re getting older, and are assuming a family member will step in if you eventually need more support, you need to talk to them about it. Check whether this is realistic, or if you need to consider more formal care.”
Building an emergency fund covering one to three years of essential expenses can provide a buffer. Those planning further ahead could consider investing for five to 10 years or longer, while pension savers may choose to earmark part of their pot for future care costs. You may eventually need to use your home, through selling, renting it out, equity release or a deferred payment agreement with your local authority. Another option is a long-term care annuity, which can provide a guaranteed income towards care fees.
Make sure anyone needing care is claiming all their benefits, said Lucie Spencer, partner in financial planning at wealth management firm Evelyn Partners. “Attendance Allowance, Pension Credit, Housing Benefit and Council Tax reductions can all can significantly help with care costs. Yet many eligible individuals do not claim.”
And she said too many overlook NHS Continuing Healthcare (CHC). “If a person’s primary need is a health need rather than social care, the NHS may be responsible for funding 100% of care costs through CHC. This is not means-tested.”
Spencer added: “People with severe dementia, complex nursing needs, challenging behaviours or significant medical conditions should always be screened for CHC before accepting that they must fund care themselves.”
Think carefully before giving assets away or transferring property ownership in an attempt to avoid care fees, she added. “Councils can investigate ‘deprivation of assets’ and may still treat them as belonging to the person. This can cause problems if the gifts have been used for paying off a mortgage or spent, as in some way they will need to be paid back.’
Coles said planning is vital given Burnham’s pledge but cautioned: “You’d be forgiven for having thought that in 1997 too.”