Britons risk losing their savings, their homes and hopes of passing on an inheritance as Labour passes the buck on social care. Families facing potentially unlimited bills if a loved one needs long-term nursing home or residential care, and some could lose almost everything.
Does anybody remember the 2017 general election, between Tory PM Theresa May and Labour leader Jeremy Corbyn?
May almost threw it away with a manifesto pledge to introduce a cap on social care costs. This stated that elderly people needing social care at home would have to pay themselves until the value of their assets – including their home – reached a floor of £100,000.
She promised that a family home would never need to be sold in a person’s lifetime. However, all the costs would be recouped after death, depleting their estate.
The policy was slammed as a “dementia tax” and although May still beat Corbyn her reputation never recovered.
Yet Reeves has done something far more brutal than May planned yet she and PM Keir Starmer haven’t faced anything like the same backlash.
After replacing May as PM, Boris Johnson tried to pick up the pieces by announcing a social care cap that was actually lower at £86,000.
This was due to come into force in October 2023, then delayed until October 2025. It wasn’t great, but it was better than nothing.
Last Monday, Reeves casually scrapped the plan. She said we couldn’t afford the estimated £1billion cost. So where does that leave us?
In an even bigger mess than before.
What she’s done is even worse than the hated dementia tax.
Scrapping the cap will place an immense burden on families, with nursing and residential homes charging an average of £56,056 a year, according to Laing & Buisson.
That will eat up family wealth at an incredible rate. The average nursing home stay is around two years, but can be a lot longer, and now families will have to pay under they’ve got almost nothing left.
Your local authority will only offer financial support in once the total value of your combined assets – including the value of your home – falls below £23,250 in England or £50,000 in Wales.
It will only cover all of your care costs once you’re down to a meagre £14,250.
These thresholds have been frozen for a decade.
May’s proposed system was four times more generous than the current one, and she took a complete hammering at the hands of Labour and the press.
The idea of a cap has been floating round since the Dilnot Commission Report on Social Care was published in 2011. Reeves has now sunk it at a stroke.
So where’s the outcry?
May’s error was being too honest (and hopeless at communicating her plan).
Labour learned from her mistake and didn’t tell voters it would scrap the cap in its manifesto.
During the general election, I warned that none of the parties were talking about social care, leaving voters in the dark.
I suspect Rishi Sunak’s Tories didn’t include it because they hadn’t got a clue what to do. Once bitten, twice shy. Rachel Reeves knew exactly what she was going to do, though, and deliberately didn’t tell us.
Ordinary families will pay a high price for her deception.
The absence of a financial cap places an immense burden on families, said Lisa Morgan, partner in the nursing care fee recovery team at Hugh James Solicitors. “Care home prices can easily hit £8,000 to £10,000 a month, forcing people to sell their homes and ask family members for help.”
Fear of substantial care expenses looms over everyone in need of care, Morgan added. “Implementing a cap on care costs is essential to ensure equitable access to social care while shielding individuals from overwhelming financial strain.”
There is no easy solution to the social care conundrum and Johnson’s cap was far from perfect.
It would only have covered social care and not the cost of food and accommodatio. In practice, the average person would have paid £238,700 for care before reaching the cap.
The £86,000 cap was never going to solve the care crisis but was a step in the right direction, said Natasha Etherton, later life financial adviser at wealth manager Evelyn Partners. “The rapid and possible total depletion of assets is now back on the cards.”
It certainly is. Millions of families will be desperately hoping that they or a loved one don’t get dementia or Alzheimer’s.
They don’t just face the horror of losing their memory or mental capacity. Thanks to Reeves, they may also lose all the wealth they built over their lifetime.
So where’s the outrage?
