Cap on Cost of UK Social Care to be put at £75,000

A sad reality for many people in the UK is the having to sell the homes they own in order to pay for social care when they become too old to care for themselves.  The British Health Secretary Jeremy Hunt called it a ‘scandal’ that every year ’30,000 to 40,000 people are having to sell their houses to pay for their care costs,’ and states one in ten have care bills amounting to more than £100,000.

To answer this situation, the government proposed setting an upper limit on the cost of care at £75,000.  The idea is that it would help homeowners to hold onto their homes and family’s inheritance – Nick Clegg, Deputy Prime Minister, wrote in the Sunday Telegraph that “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.”

The cap is dependent upon people having to take out health insurance of their own to enable them to pay the possible full £75,000 cost of elderly care when the times comes for it to be needed.

Nevertheless, the proposal of the cap does come at a cost to the government – in the region of a billion pounds.  This is to be recovered from a freeze on Inheritance Tax at its 2009 frozen rate of £325,000.  The freeze would stay in place until 2019 and would mean the tax wouldn’t rise in line with inflation.

The proposals have had a mixed response, with some praise and some criticism stating they don’t go far enough in helping meet the needs of the country’s aging population.