It has been pushed into the political long grass for decades but finally, like so many things in life Covid-19 has made the UK’s broken social care system an urgent problem that needs solving right now.
This week it emerged that the government was considering yet another new approach to the long-term care funding crisis – taxing the over 40s more through the National Insurance system.
Other options on the table include making some form of long-term insurance policy mandatory.
These are the latest in a long history of controversial options considered over the years, including the so-called “dementia tax” and earlier “death tax” that have been floated by governments and then gunned down opposition parties as the social funding chasm gets ever wider.
Local authorities spent more than £22bn on social care in 2018-19, which may sound substantial but is less than the amount spent a decade ago, according to health policy think tank The King’s Fund. And that’s against a backdrop of an increasing elderly population and rising care needs per person.
The Local Government Association now estimates that the UK faces a social care funding gap of almost £4bn by 2024.
Expect to need care
Most Britons don’t believe they will require support as they age, despite extensive evidence to the contrary. Around 70 per cent of older people in England, for example, receive some sort of care, with many more needing it but not receiving support. With much of the focus trained on the ageing population, there are also hundreds of millions being spent by councils and private citizens on care for those of working age, including people with learning difficulties or mental health needs.
Care requirements will range from an hour’s assistance at home every day to full time nursing care in a specialist facility, so the associated costs can vary dramatically.
Some estimates suggest that an hourly rate for at-home assistance will come in at around £20, giving people assistance in getting up and dressed perhaps. There may also be equipment costs to cover depending on your needs.
At the other end of the spectrum, those who live in care homes full-time with no government assistance can expect to pay an average of £645 a week for basic residential services including help dressing, washing, moving around and meals.
If dementia care in a specialist property with full medical nursing facilities is required though, a study by LaingBuisson found the average bill came in at more than £900 a week last year.
With costs varying by region, Northern Irish residents would usually part with an average of £715 a week for full nursing care in light of dementia, but in the east of England the bill for similar care was an average of £1,060 last year.
There is some state support on offer, but only if you have total capital assets worth less than £23,250 in England for example. Slightly different limits and rules apply in the other countries of the UK.
If you or the people you love need care the local authority will assess your ability to pay based on this threshold, which will take into account the value of all your assets including any property – though it won’t consider things like life insurance.
The authority will then inform you of the amount you’ll have to contribute to your care. If your assets put you over the means-testing threshold you’ll foot the whole bill. Less than a third of those who need care are fully funded by their local authority, according to new research from Key.
However, if that would mean having to leave your home, especially if your care needs are short term or someone else is living in your home such as a partner or dependent, special arrangements can be made.
The cost of long-term care can quickly become hundreds of thousands over the years. And yet barely a third of the over 55s have plans for covering those costs if they need them.
Can you insure against care bills?
The sheer variety of potential need and the costs involved make it very tricky to offer an affordable mainstream long-term care insurance product or tempt enough of us to buy one.
These products have been attempted in the past, but are no longer available, though an immediate needs annuity – whereby you purchase a policy with a lump sum to cover the cost of future care costs is an option if you need care imminently – is an option from a small handful of providers.
Elsewhere, Vitality customers with serious illness insurance may be able to take advantage of the free option to convert their policy to one that covers illnesses typical of older age, such as dementia, when it ends.
On the whole though, industry experts acknowledge that it’s hard enough convincing Britons to cover their financial security for today, let alone tomorrow.