The cost of care

The ‘care crisis’, a phenomena that’s had plenty of media coverage in recent years, since Andrew Dilnot chaired an inquiry into the future funding of social care back in 2010. The Dilnot Commission published its recommendations in 2011 resulting in reforms in 2016 which many experts have said didn’t go far enough to resolve the social care gap.

According to Carers UK1;

“Families have been taking on ever growing levels of intensity of caring responsibilities for older and disabled relatives and friends as we’ve seen the amounts of social care funding fall relative to the number of people needing care.”

They estimate that the current level of unpaid care being given in the UK is worth £132 billion. The charity argues that unless unpaid carers are given the right support there are frequently negative consequences for carers’ physical and mental health, finances and relationships. What does the latest research on later life care tell us?

Living longer, but with high care needs

A study by experts at Newcastle University 2 estimates that by 2025 there’ll be more than 350,000 additional older people with substantial care needs, necessitating an extra 71,000 care home places will be needed in the next eight years. The study also reveals that while overall life expectancy has been increasing, we can expect to spend a smaller proportion of later life in good health:

This increase in both the duration and severity of care needs in later life has knock-on effects on finances and carers.

Underestimating the cost of care

In research by Scottish Widows think tank – the Centre for the Modern Family 3 – participants were asked to estimate the cost of a week’s residential care – giving an average answer of £549. The reality is that care costs are nearly 60% more than this at £866. This could mean a potential shortfall over a period of one month of around £1,374. UK wide this equates to an annual deficit of £7billion. And with 42% of people having £2,000 or less in savings – paying for care for anything more than a week or two is likely to push them into financial difficulty. In fact 23% of participants said that caring responsibilities had put a strain on their finances and 12% said they’d had to make sacrifices to cover the cost of care for themselves or a relative.

What can be done to resolve the issue?
Dilnot made a number of recommendations for change including a cap of £72,000 in lifetime care costs, as well as changes to means-testing. While these recommendations have been well received by many, the plans were dealt a blow when local councils’ raised concerns about affordability. As a result the cap, which had been due to come into force in April 2016 has been delayed until at least 2020.  The Centre for the Modern Family make three proposals of their own to combat the care crisis:

  1. Consider evolving automatic enrolment to include income protection and care insurance. This is something other countries such as Germany already do.

  2. Drive greater awareness of the need for families to discuss their care needs.

  3. Encourage more businesses to consider agile working. To help make it easier for people to balance work and caring responsibilities.

For our part we believe that there’s a huge need for education, starting young and continuing throughout our working lives and beyond about the financial implications of long term care. We need to discuss as families how we might pay for care for ourselves, our parents and other loved ones so that at an emotionally difficult time we’ve already had conversations about how we’ll manage. If you’d like to talk to us about paying for care now or planning how you’d do so in the future please don’t hesitate to get in touch via our website or on 0800 048 0150. You can also find more information in our factsheet.

 

1 Carers UK responds to new research on numbers of care home places needed, press release, 16 Aug 2017

2 Extra 71,000 care home places needed in eight years, study warns, CFAS Research, Press office, Newcastle University, 15 Aug 2017

3 The Cost of Care: The financial and emotional impact of providing social care for family members, Report by the Centre for the Modern Family, 30 Aug 2017

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