What happens if you need to go into care, but cannot afford to pay the skyscraper prices of a luxury care home? Under the current system, if you meet a certain threshold the Government will pay for a home of their choosing. However, the threshold is such that often many people still struggle to pay the fees. So, what is the answer?
Damian Green (MP and former First Secretary of State) thinks he has solved (or at least reduced) the issue: a social care system modelled on the State Pension System. That is to say, everyone would be required to make contributions into the social care pot through an increase in National Insurance contributions. Simple enough.
Of course, a little more probing into the proposal raises many more questions. Damian Green has suggested the system will require an extra £2.75bn. Roughly speaking, this would mean increasing National Insurance contributions for those over 50 by 1%.
However, other organisations have suggested a more accurate figure might be £7bn, rising to £14bn by 2030. Suddenly the costs are starting to stack up. There may be a proposal for the social care National Insurance contributions to start earlier than age 50, raising yet more questions about whether there will be public support for a policy that most people of working age are unlikely to consider relevant.
While Damian Green has recently made a fresh push to bring these reforms about, the proposal has actually been around since 2017. Support for the reforms has been sporadic, but it is worth remembering this is a target area for change in the years to come.
Redwood is one of the Souths’ leading Pensions, Investments, Wills, Trusts & Estate Planning providers and we are dedicated to helping families to grow, protect and enjoy their wealth. With our unrivalled knowledge of Estate Planning and Probate, we can advise on any situation. We specialise in helping our Clients with Long Term Care Fee Planning. Join us at one of our Free Public Information Seminars: Book online Book Me A Place!, Call us on 01489877 547 or Email info@redwoodfinancial.co.uk to book a FREE Initial Meeting with us to review your financial planning needs.
