The divide between health and social care in the UK is a cruel one. On the one hand, people who need care from a hospital receive it gratis regardless of their wealth. On the other hand, people who need care from a residential home, but have assets of more than £23,250, must dip into their own pockets. In residential homes up and down the country, thousands of these “wealthier” pensioners are watching their life savings dwindle as they fork out £30,000 in care fees each year.
These wealthier pensioners are a significant asset for the taxpayer. Were it not for their contributions, the state would need to find an additional £5 billion each year in care fees. But, despite the size of their contributions, self-funders are getting little support from the state in return. New LGiU research, conducted in association with the insurer Partnership, found that many pensioners are not accessing financial advice that can help them sustain their savings in the longer team. As a result, 25 per cent of people who pay for their own care will go through their savings at such a rate that they’ll reach the £23,250 threshold or run out of money entirely.
Running out of money is bad news for both councils and individuals. Councils retain liability for self-funders who run out of money and, as a result, are picking up a bill that we estimate at £490 million per year but could be as high as £1 billion. Individuals, meanwhile, often have to contend with a traumatic move to a cheaper new care home that they won’t know and may not be to their liking.
There are simple things that councils can do to help ensure that self-funders don’t run out of money. The most important, as the LGiU argues in the report, is ensuring that people in need of care who approach a council are told to access financial advice. A good, SOLLA-accredited IFA will be able to help them make financial arrangements that guarantee a steady income stream for the remainder of their life, and have some money left. Our research found that only half of councils currently signpost people who approach the council to independent financial advice. Only 3 per cent provide lists of IFAs.
At the report'slaunch this week, hosted by Local Government APPG Chairman Heather Wheeler MP and attended by Health Select Committee Chairman Stephen Dorrell MP, there was broad agreement that councils could, and should, do more to ensure that people have access to independent financial advice when making decisions about funding their care. MPs and councillors present emphasised the distress and uncertainty that self funders suffer when their money runs out. Officers present, meanwhile, agreed with our emphasis on the role of councils in ensuring that IFAs had proper accreditation and could be trusted.
There was also a recognition, however, that councils can only do so much. National politicians need to do their bit by tackling the assumption that adult social care is free and, as Stephen Dorrell argued, helping punch through the divide between local government and the NHS. The latter, more ambitious goal, will cut down wasteful duplication of spending and help tackle issues like “bed blocking”. Councils such as Swindon, with its integrated (but soon to be abolished) PCT, provide a model for closer co-operation. We’ll need this kind of radicalism if we’re going to be able to look after an estimated 1 million 100-year olds in 2070.