Are we finally heading for a review of means-tested social care?

We were certainly led to believe that Boris Johnson had means-tested social care high on the agenda when he first entered ‘Number 10’ over two years ago,

“My job is to protect you or your parents or grandparents from the fear of having to sell your home to pay for the costs of care. And so, I am announcing now – on the steps of Downing Street – that we will fix the crisis in social care once and for all, and with a clear plan we have prepared to give every older person the dignity and security they deserve.”

Yet, here we are, having come through one of the biggest crises of our generation, and regrettably means-tested social carehas been replaced with other ‘more pressing’ matters. Not exactly surprising if you have been following the issue of social care funding, for which a Royal Commission in 1999 also fell flat, other than a few enquiries, reports, and more proposals since.

The Care Act, 2014, set up a framework following a proposed funding structure (Andrew Dilnot’s review, 2011) to resolve the issue of money, morality, and care for the elderly and disabled. This again was deferred, and it is only now that the impact of the Pandemic on nursing and care homes, has rekindled the flame beneath the Prime Minister’s 2019 statement once again.

How could means-tested social care affect your retirement plans?

In a recent post, we were discussing changes to the Pension Lifetime Allowance, and how crucial it is to get ahead of the game. As if that weren’t reason enough to start putting secure retirement plans in place, we must then think about how ageing has other financial implications.

And although means-tested social care is back on the Treasury’s to-do list, going on past experience, the time really could be ticking for you to seek the best financial advice to secure your future.

Rumours were rife that the cost of social care would be addressed by increasing all National Insurance rates by 1%, in effect, breaking the 2019 Conservative manifesto commitment. Other similar suggestions have been offered, potentially leaving the 1% levies labelled and branded as a new NHS/Care tax.

Whatever does finally come out of any new reviews, and more accurate current data collection, you could be required to pay a personal contribution of £50,000 - £100,000 before any state aid kicks in.

Under the current financial assessment, or means-tested social care, the council will generally pay towards your care costs if your savings fall below the £23,250 threshold.

And with the average person requiring social care worth around £20,000 during their lifetime, this is another consideration when planning for your retirement. N.B. this cost could rise significantly depending on your health, marital and domestic circumstances, and care requirements.

How to prepare for a social care financial assessment

A Financial Assessment Officer will visit you at home to ask about such things as your earnings, pensions, benefits, savings (Life Insurance policies are excluded), and property (including any overseas property).

Substantially reducing savings or giving property away will work against you, as the officer is also likely to ask about what you used to own as well as your current portfolio.

It will benefit you to be prepared with details of your bank account savings, ISAs or premium bonds, other savings and investments, and the value of any land and property.

If you need a paid carer who comes into your home, the value of your home is not included within the financial assessment. But if you are paying for a care home, unless your partner or spouse will remain living in the marital home, the value of that property will be included.

How can Simpson Financial Services ease your concerns around means-tested social care?

We have expert teams who specialise in retirement planning, estate planning, tax efficiency, and all other financial areas which may be affected by future changes to means-tested social care should you have any concerns.

Making sure you are in the best, most comfortable financial position now, heading for your retirement, and beyond is exactly why we are so highly recommended by our past and existing clients. We understand what is important to you, and that making sure your family is in a secure position is also one of the things that keeps you awake at night.

With the country’s economy facing so much change and uncertainty, one of the things we can do is take the financial worry away from you.  

Our comprehensive financial planning service includes an initial assessment of your current financial situation, budget and commitments, your tax position, risk profile, financial goals, and wealth management.

As a finance broker, we have access to all providers and are not tied into any individual lenders. So, the Independent Financial Advisors here can guarantee to find you the most appropriate and efficient products across your portfolio.

As part of our financial service, we carry out regular reviews, so you don’t have to worry about the markets or how your savings and investments are performing. The most up to date financial technology also means we can keep you appraised of your pension plans and provide you with forecasts so we can decide together on your bespoke personalised financial strategy.

You will never need to worry about how any sudden changes to means-tested social care or other social care reform might impact you or your loved ones, because we keep abreast of the financial news and act accordingly. Simpson Financial Services are the experts to have in your corner when it comes to all your financial planning needs. Contact one of the friendly team today to start preparing for an exciting, worry-free, future.