The ‘real cost’ for care is £200k
This warning comes amid rumours the coalition are planning to double the threshold from Andrew Dilnot’s proposal of £35,000.
Chris Horlick, managing director of care at Partnership said: “If the personal care cap is set at £75,000 few people going into residential care will be alive to benefit from it.”
People must meet all their general living expenses, hotel and personal social care costs before the cap kicks in. They will only receive help on the personal social care element up to the local authority rate. This is typically a third of total costs.
Partnership estimates the average person in a single nursing care room in the South of England will pay £42,500 a year in living expenses and hotel costs, before they reach the cap. As a result, an individual may have to live for five years in residential care before they receive any benefit from the cap.
Bupa figures show average life expectancy in care is two years and three months. Partnership said on average their policyholders, who are self-funders, have a life expectancy of four years. Only 8% of their customers would live long enough to benefit from a discount from the £75,000 figure.
Currently, people have to pay for long-term care if they have assets over £23,250 in England. The cap is expected to be introduced by 2015, but will not apply to those with capital under £100,000.
Horlick added: “It emphasises how important it is for people going into care to get appropriate financial advice. Failure to do so means that they might not purchase the correct financial product to protect them from the substantial costs of care.”