New proposals could see pensioners remortgaging to pay for home care

11 November 2011

Pensioners may be forced to remortgage their property in order to pay for care in the home, under plans being considered by ministers.

These shocking new plans would see pensioners who currently receive free care at home having to fork out for help with washing, feeding and clothing themselves.  Under the current means tested care system, anyone in England receiving care in the home needs to have savings worth over £23,250 before they are expected to pay for their own care.  The value of their home is not taken into account, and only becomes a factor if they move into residential care.  The new proposals would see pensioner's homes being taken into account in the means test, forcing many people above the £23,250 limit meaning care is no longer free. 

Dilnot Report
The new proposals are contained within the Dilnot Report, however crucially this report also recommended a contribution cap of £35,000; meaning no one would ever be expected to pay more than £35,000 towards their own care.  Taking into account the value of people's homes without the safety net of a capped contribution could mean some pensioners are left to pay sky high care bills.  In fact, one in ten pensioners face costs of more than £100,000.  Speaking to the Daily Mail, Ros Altmann, Director General of Saga, described the new proposals as a 'smash and grab raid on those who need care.'

Home is where the care is
Care at home is a popular option with the majority of people preferring to stay at home.  Around 530,000 people currently receive care in their own home and of this, 364,000 receive funding from the local authorities.  Take into account the value of their home, and this number could dwindle.  Good news for local authority budgets but bad news for pensioners who are left to find a way to pay for their newly acquired care bill. 

Care funding maze
Even without the new proposals, the current care system can be hard to navigate, especially if the need for care is sudden and unexpected.  Families are often left alone to find and employ their own care, explore state benefits and plug any funding gap.  For this reason, Key has launched its new Care Planning Service.  Our Care Specialists can help check if you or your loved one is entitled to state funding, assist you in finding a care provider and ensure that your care fees can be funded over a period of time. To speak to a Care Specialist today call us on 0808 156 2698.  Lines are open Monday - Friday, 9am - 5.30pm. 

Once our Care Specialist has completed a full assessment, equity release may be explored as an option for funding home care for those with savings over £23,250. An initial consultation with one of our expert advisers would help to explain how equity release could help you to safely unlock money from your home which could be used to pay for your current or future care needs.  Your local adviser would explain how all plans reduce the value of your estate and how equity release may affect your entitlement to state benefits.  Book an appointment today to find out if equity release could help you or a loved one to pay for care. 

If you are considering equity release, you should read through is it right for you carefully.