Published: . 19:32 EST, 11 May 2014 . | . Updated: . 09:56 EST, 12 May 2014 . Pensioners who require long-term care could end up paying double the much-vaunted cap on costs because there are so many hidden charges, a report claims. The Coalition has pledged that no one will have to pay their care costs if they spend more than £72,000 – with the state stepping in to foot the bill after that. But the pledge does not cover the full bill for elderly care. Cap: The Coalition said that the cost of care would be capped at £72,000 . Among the costs not included in the cap is the ‘bed and board’ bill for living in a care home, which can exceed £10,000 a year. Now the Institute and Faculty of Actuaries has found that these hidden charges mean people will shell out an average of £140,000 before they reach the level of the cap. Their research also found that only around one in ten pensioners will ever reach the point of receiving help from the state – the majority will have to bear the full costs themselves. They concluded that the cap has been set so high that only around 8 per cent of men and 15 per cent of women who enter care will ever reach it. Thomas Kenny, one of the authors of the report, said: ‘Anyone who is expecting that the cap will pay for care is in for a shock. ‘The cap is there to protect against catastrophic costs, and we estimate that few people entering care aged 85 years will reach it.’ Warning: Dr Ros Altmann, a former government adviser, warned that people still need to save to provide for their old age . The Coalition has pledged to end England’s care crisis, which can see the elderly facing unlimited care costs – leading to tens of thousands having to sell their homes every year. The cap, which will come into force in 2016, will be set at £72,000 and will cover nursing in care homes or the cost of home helps. After this level, the state will step in and pay the rest. However, it will not cover a range of costs such as bed and board, or help for those whose needs are not deemed to be ‘substantial’ by the council. People will also pay extra if they do not want to live the type of ‘bog standard’ home a local authority would fund. The study found that once these hidden charges are factored in, people would have spent an average of £140,000 by the time they reach the so-called cap of £72,000. Mr Kenny said many people would still have to dip into the money locked up in their property to pay for care. ‘Recent research data shows that one in three women and one in four men aged 65 today is likely to need care,’ he said. ‘Yet the average disposable income for retired households was £18,700 in 2011/12, which is below the level required to fund average long-term care costs before reaching the cap.’ He said that, even with the cap, people would have to save through their lives to pay for care, and called on more people to take out pension plans which include a care element. 'With the right tax incentives and flexibility, there are products that could help people to meet any care needs that they may have in the future,’ said Mr Kenny. Although the average person is expected to spend around £140,000 on care costs before reaching the cap, this can increase to some £250,000 if a person is in care for 10 years. There are also significant regional variations in the costs and the amount of time it will take for the cap to apply. In London, someone entering a care home aged 85 is expected to reach it in four years and incur a personal cost of £117,000 before reaching it. In the West Midlands however, it will take seven years to reach the cap with a personal cost of £170,000. Ros Altmann, a former Treasury adviser on older people, said: ‘The government is not going to cover the care costs for most people. Even with the cap, most people will still end up paying all their costs. ‘People are not putting money aside but they need to, because society cannot afford all the older people coming through. ‘We will all be affected by this. We need to make provision – the state won’t cover it.’ Last night a spokesman for the Department of Health said: ‘We are introducing the first ever cap on care to protect people from catastrophic costs and deferred payments so no one should be forced to sell their home in their lifetime. ‘Our reforms will mean that more people will get financial help sooner.’
The Coalition pledged nobody will pay care costs above £72,000 .
But new report claims the 'cap' is full of hidden charges .
Institute and Faculty of Actuaries claim real costs will be twice as much .
Published: . 19:32 EST, 11 May 2014 . | . Updated: . 09:56 EST, 12 May 2014 . Pensioners who require long-term care could end up paying double the much-vaunted cap on costs because there are so many hidden charges, a report claims. The Coalition has pledged that no one will have to pay their care costs if they spend more than £72,000 – with the state stepping in to foot the bill after that. But the pledge does not cover the full bill for elderly care. Cap: The Coalition said that the cost of care would be capped at £72,000 . Among the costs not included in the cap is the ‘bed and board’ bill for living in a care home, which can exceed £10,000 a year. Now the Institute and Faculty of Actuaries has found that these hidden charges mean people will shell out an average of £140,000 before they reach the level of the cap. Their research also found that only around one in ten pensioners will ever reach the point of receiving help from the state – the majority will have to bear the full costs themselves. They concluded that the cap has been set so high that only around 8 per cent of men and 15 per cent of women who enter care will ever reach it. Thomas Kenny, one of the authors of the report, said: ‘Anyone who is expecting that the cap will pay for care is in for a shock. ‘The cap is there to protect against catastrophic costs, and we estimate that few people entering care aged 85 years will reach it.’ Warning: Dr Ros Altmann, a former government adviser, warned that people still need to save to provide for their old age . The Coalition has pledged to end England’s care crisis, which can see the elderly facing unlimited care costs – leading to tens of thousands having to sell their homes every year. The cap, which will come into force in 2016, will be set at £72,000 and will cover nursing in care homes or the cost of home helps. After this level, the state will step in and pay the rest. However, it will not cover a range of costs such as bed and board, or help for those whose needs are not deemed to be ‘substantial’ by the council. People will also pay extra if they do not want to live the type of ‘bog standard’ home a local authority would fund. The study found that once these hidden charges are factored in, people would have spent an average of £140,000 by the time they reach the so-called cap of £72,000. Mr Kenny said many people would still have to dip into the money locked up in their property to pay for care. ‘Recent research data shows that one in three women and one in four men aged 65 today is likely to need care,’ he said. ‘Yet the average disposable income for retired households was £18,700 in 2011/12, which is below the level required to fund average long-term care costs before reaching the cap.’ He said that, even with the cap, people would have to save through their lives to pay for care, and called on more people to take out pension plans which include a care element. 'With the right tax incentives and flexibility, there are products that could help people to meet any care needs that they may have in the future,’ said Mr Kenny. Although the average person is expected to spend around £140,000 on care costs before reaching the cap, this can increase to some £250,000 if a person is in care for 10 years. There are also significant regional variations in the costs and the amount of time it will take for the cap to apply. In London, someone entering a care home aged 85 is expected to reach it in four years and incur a personal cost of £117,000 before reaching it. In the West Midlands however, it will take seven years to reach the cap with a personal cost of £170,000. Ros Altmann, a former Treasury adviser on older people, said: ‘The government is not going to cover the care costs for most people. Even with the cap, most people will still end up paying all their costs. ‘People are not putting money aside but they need to, because society cannot afford all the older people coming through. ‘We will all be affected by this. We need to make provision – the state won’t cover it.’ Last night a spokesman for the Department of Health said: ‘We are introducing the first ever cap on care to protect people from catastrophic costs and deferred payments so no one should be forced to sell their home in their lifetime. ‘Our reforms will mean that more people will get financial help sooner.’
many hidden charges, a report claims. The Now the Institute and Faculty of Actuaries has that the cap will pay for care is in for a shock.