The Dilnot Report – What it means for Long Term Care planning
July saw the publication of the long awaited Dilnot Report looking at the funding of long term care.
As the population has continued to get steadily older, more and more people have become worried about losing their savings – and possibly their homes – because of the need to pay for long term care. It’s been widely acknowledged that a thorough review of the funding arrangements has been long overdue, with Andrew Dilnot, the economist who led the commission, calling the present regime “confusing, unfair and unsustainable.”
So what are the main points of the Commission’s recommendations?
- A cap of £35,000 on an individual’s lifetime liability for care costs
- Food and accommodation costs are not capped – but liability is limited to £10,000 a year
- The threshold of savings and assets above which the state offers no help with care costs has been raised from £23,250 to £100,000
Although the proposals have been broadly welcomed, there has also been criticism. Commentators have pointed out that with the already projected rises in health spending (as the baby boomer generation ages) the Government simply doesn’t have the money to implement Dilnot’s recommendations – especially when the ever increasing bill for public sector pensions is taken into account.
In addition, the Government doesn’t have a particularly impressive track record of moving quickly where reforms like this are concerned. In 1997 Labour made reforming the funding of care a priority. Fourteen years later we finally have a report.
So where does this leave someone who wants to plan for long term care now – either for themselves, or perhaps for ageing parents? After all, even Andrew Dilnot does not expect implementation of his report before 2014.
The safe answer is almost certainly to make a start by talking to your usual adviser about long term care planning. They will be able to give you an idea of likely costs and suggestions on the best and most tax efficient ways in which to meet those costs.
Department of Health: http://www.dh.gov.uk/en/Aboutus/Features/DH_128017
Daily Telegraph: http://www.telegraph.co.uk/health/8617589/Why-Andrew-Dilnots-report-on-long-term-care-needs-revising.html