Tuesday 7 February 2012

The care crisis will not go away - it will only get worse


Social Care White Paper reforms must address both funding and delivery of care as our population ages

Reform of long-term care in this country can no longer be left to the long-term.  As the crisis surrounding social care deepens by the day, it is clear that urgent reform is required.  While the Government worries about inadequate pension savings, the reality is that pensions are not the only financial requirement for later life.  People will need money set aside to cover care needs and the costs of care will be far higher than the normal day-to-day living costs that pensions will pay for.  We know that there is not enough money set aside for pensions, but at least there is some.  When it comes to care, almost nobody has planned to cover those costs.

People do not realise they will have to pay for care until it's too late: Latest figures from Anchor provide further evidence of our social care crisis.  They highlight that millions of people wrongly believe that the state will pick up their care costs if needed.  They are completely unaware that half of all over 65s will need at least £20,000 to cover their later life care needs, and one in ten will face costs of over £100,000.  It is often only when they actually need care that they find out, too late, that they have to meet the costs. Because our system is so complex, inconsistent and incoherent, people mistakenly believe that they are covered by the NHS and are not preparing for the eventuality or setting aside money to finance their future care needs.

This is not just about old people - it affects families:  Care is not just about old people, it is about families up and down the country.  Hardly anyone is setting aside money to pay for the inevitable costs of looking after our aging population, leaving frail older people facing the loss of all their assets if they have care needs that do not receive any state support.  We know that millions more people will need social care in future, but the funding is being left to cash-strapped councils which are responsible for social care, but which each operate their own system of care funding in a postcode lottery that is grossly unfair and confusing.

Social care seems almost a random lottery, depending on what illness you have and where you live:  Nobody has been encouraged to prepare for care, which means that there is almost no money set aside to meet the spiralling costs.  Older people, and their families, are unaware of the random lottery that encapsulates social care in this country.  Depending on what kind of care you need, what kind of illness you have, where you live and how much money you have managed to save in your lifetime, you may find that the State pays all your care costs, or none of them.  If you are judged to qualify for NHS care, taxpayers cover the entire cost.  If your care needs are judged to fall outside the NHS, then anyone with more than £23,250 will face paying the whole bill.  And, even for those without assets, some councils will fund their care needs, and others will not.

Government White Paper on Social Care is due in May - it must introduce urgent and adequate reforms of both delivery and funding for care:  The Government has an opportunity to reform the delivery and funding of social care, as the Social Care White Paper is being drawn up.  We must ensure that our care system is put on a sustainable footing, with clear lines of responsibility and a system that people can understand and plan for.  Later life income is not just about pensions.  Saving for potential care needs, for yourself or your family, is also critically important.  Care cannot be delivered on the cheap and failure to properly plan for the foreseeable needs of our aging population has left millions of families facing financial ruin in our unfair, broken system.

Recommend special ISA allowance for care and possible tax incentives for care saving plans:  Saga is calling on the Government to introduce a special ISA allowance for people to be able to set aside money, tax free, to save for their future care needs, or those of a loved one.  If people were allowed 5 years of extra ISA savings, that would mean over £50,000 set aside which could be used to pay for care for themselves, or someone else, if needed.  That way, at least some money would be there to pay for future care needs rather than families having to desperately find funds at the point of needs, as so often happens now.  Incentives for family care savings plans, perhaps tied in with pension allowances via the workplace, would also be of great value in helping people address the


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