Personal PensionNov 23 2015

Four out of 10 would deplete wealth to avoid care costs

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Four out of 10 would deplete wealth to avoid care costs

Forty-three per cent of people in England would deliberately deplete their wealth to avoid paying for care, leading to more pressure on state finances than ever before, statistics from the latest Partnership Care Report show.

Findings show the number of people prepared to reduce their assets below the £23,250 annual threshold to ensure local councils pay for their long-term care has nearly doubled from 23 per cent (2013) to 43 per cent (2015).

Partnership said that between 2012 and 2015, 9,774 individuals were interviewed for the report.

This breaks down into almost 200 advisers, 24 powers of attorney [face-to-face] and tranches of those aged 40 plus.

The report has warned this move could see councils shouldering an additional £1.62bn burden in England alone if those who claim they will spend their wealth do so.

The reform to the Care Act had already been delayed until 2020 as it was declared ‘too expensive’, a move which was predicted to affect 23,000 pensioners.

Andrew Dixon-Smith, business development director and adviser at the Eldercare Group, said the Care Act provided an expectation for a new opportunity to receive a contribution from the government towards the cost of care.

He believes the postponement until 2020 and the raising of capital limit from £23,250 to £118,000 was disappointing for the public.

Mr Dixon-Smith said: “They are more likely to seek other opportunities such as gifting their assets to reach the £23,250 limit of assets to claim local authority funding.

“However if they do so at a time they are/have been receiving care the value of what they gift is likely to be counted back in as if they still owned the asset in an assessment process.

“There is no time limit on this and the local authority have strong powers to investigate and verify any statement of a claim.”

It has been estimated that councils in the south east (excluding London) and east will shoulder most of the burden due to the higher cost of care homes in this region.

The report has predicted the south east will need to spend £337.5m annually to support the number of people entering the care system.

In contrast, those in the north east, the region already most likely to claim local authority support for care - are also the most likely to say they would spend and look to the state for support, a move that would cost local councils £202.9 m annually.

In May 2013, the Care Bill was welcomed by industry figures.

In the 136-page bill, the government set out plans to enshrine caps on cost and financial support, alongside proposals to improve the quality of care and the qualifications of care providers.