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News - 13 February 2013

A New solution for elderly social care is announced.

The government is due to announce its "fully-funded solution" to the problem of elderly people in England who cannot afford social care. The “fully funded solution” is expected to include a £75,000 cap on the costs people pay for care and a rise in the threshold for means-tested support from £23,250 to £123,000.

Health secretary Jeremy Hunt said the "scandal" of many people selling homes to pay care bills must be tackled. At present, up to 40,000 people every year are forced into selling their homes because they face unlimited care bills.

Deputy Prime Minister Nick Clegg said:
"We will make sure no-one is forced to sell their home to pay for care in their lifetime, and no-one sees their life savings disappear just because they developed the wrong kind of illness."

Peter Ham Auditor and Head of Schools and Charities at ABDS comments:
“The cost of accommodation in residential care homes averages about £7,000-£10,000 a year. While the cap is a sizeable sum the hope is that, by establishing the principle that the state will cover the really high costs, people will start planning for their future care needs.”

Mr Hunt, who said 10% of people ended up paying more than £100,000 in care costs, commented that "just as people make provisions for their pensions in their 20s and 30s, so we also need to be a country that prepares for social care as well".

As well as introducing a cap, the government is expected to increase the means-tested threshold - there to ensure the less well-off get state help towards their care costs.

Mr Hunt is also expected to reveal that the plans will be part-funded by freezing the inheritance tax threshold - at £325,000 for individuals and £650,000 for couples - for three years from 2015.

The shadow minister for care and older people Liz Kendall said that while the government's plan would help:
"We need a far bigger and bolder response to meet the needs of our ageing population: a genuinely integrated NHS and social care system which helps older people stay healthy and living independently in their own homes for as long as possible."

The National Pensioners Convention said the proposals "simply tinker at the edges" and that a £75,000 cap "will help just 10% of those needing care, whilst the majority will be left to struggle on with a third-rate service".

If you need any help and advice on Retirement Planning, Inheritance tax, capital gains tax, or in settling an estate, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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