None of us really wants to think about a time when we will no longer be able to take care of ourselves, but the reluctance to plan ahead for a time when we might need care either in the home or in a care home will create serious problems when the time comes.
A lack of insurance products available to cover long-term care costs and a system that does nothing to help those who have managed to amass assets throughout their life conspire to cause financial difficulties for many families who have older relatives needing assistance as they age.
The problem is only going to be exacerbated as care fees rise ever higher and local authorities and NHS Trusts become increasingly strapped for cash, pushing the burden of funding care further onto the family rather than the state.
The Competition and Markets Authority (CMA) review into the residential care homes sector, which was published late last year, found that the current system of providing care “is not sustainable without additional funding”. The shortfall is estimated at £1bn a year, as the fees paid by councils are lower than the care home charges incurred.
The result is a cross-subsidy system, where those people who are self-funding their care – and are paying an average of £44,000 a year – are facing fees that are 40 per cent higher than the council-funded residents to allow the care homes to continue operating.
The injustice of this, from the perspective of the self-funders at least, is clear. But there are other sharp practices that have become apparent as a result of this review. For example, some homes will charge up to four weeks’ worth of fees to a family after a resident has died. At around £846 per week on average, this amounts to an additional £3,385, allowing for rounding, so is not an insignificant amount of money.
The idea that homes can continue to charge weekly fees for up to a month after a resident’s death does not pass any kind of moral test – they cannot say it is for care or lodging that is being provided, for example, and adds insult to injury for the bereaved family.
Large upfront fees are also an issue, and as most families are attempting to find a care home for a loved one at a time of heightened emotional stress, they are not best placed to try to compare and contrast fees across a number of care homes.
If a relative needs long-term care, even relatively substantial portfolios will be whittled away to nothing in a short period of time, and some are forced to sell the family home to fund the care.
So, in many ways, having money behind you is a bad thing when it comes to care fees funding, although it does give you a greater choice of care home. If you have more than £23,250 in assets, you will need to fund all of your care yourself. If you have less than £14,250, then you will not have to pay anything at all.
There was a plan to cap all care fee payments at £72,000 from 2020, but there is now uncertainty as to whether this cap will apply. In any case, fees you have paid prior to this legislation coming into force would not apply to the lifetime cap, according to Age UK, so most people would still lose out.
It used to be possible to buy insurance to cover long-term care fees – it was not cheap, but it was effective for those who had it. But these policies have disappeared, although Steve Webb at Royal London has proposed a new "care pension" as a means to deal with the high cost of care that one in four of us will need in later life.
He said: “A care pension could build on the increasingly popular income drawdown product by adding in care insurance. To make this work, the government would need to make sure payments into such policies were tax-free, and would need to introduce an overall cap on lifetime care costs. With these changes, millions of people could start to build up protection against the risk of facing catastrophic care costs in later life.”
Whether these products come to fruition or not remains to be seen, but there is no doubt that the whole area of long-term care needs to be revamped to be fit for purpose in the future. Too many families are being left to their own devices to fund care for older relatives, and the amount of help available from local authorities and the NHS – even from the point of view of getting advice and care reviews alone – is not really adequate.
The fault does not lie with the poor staff who bear the brunt of the problems by dealing with irate families or trying to help those needing care stay in their own homes as long as possible.
But without more effort being put into making real changes to the way this sector runs, the prognosis looks grim.
Alison Steed is a freelance journalist
