Is the elderly care cap actually a good deal?

The government announced on Monday that the costs of personal care for the elderly in England will be capped from April 2017 at £75,000.

Health Minister Jeremy Hunt told the House of Commons that the "historic" reforms would save thousands of people from having to sell their family home to pay for care.

People who receive social care while living in their own homes will have their costs totted up like a taxi meter.

Once the meter hits the cap of £75,000, all social care provided thereafter will be free, regardless of their financial circumstances.

But is the announcement really the good news it’s being sold as?

Claire Barker, chair of the Equity Release Solicitors Alliance, said: “Although the announcement is step in the right direction, providing concrete guidelines to help people prepare for care costs, experts have voiced caution warning the new scheme isn’t as generous or straightforward as it initially appears.

“It’s disappointing that the recommended cap of £35,000 was not introduced, and it’s important to remember that there are still a number of years to go into the cap comes into force.”

Ms Barker refers to the recommendations of the independent Dilnot Commission in 2011 who said that £35, 000 was the correct level to put the cap at.

Chris Bean, head of residential conveyancing, Gaby Hardwicke, said: “It’s a great headline, but the reality is that a lot of people will still have a huge amount of other costs."

These costs are the “hotel” costs or the costs of board and lodging.

These are likely to be limited to a maximum annual cost; however this is likely to be as much as £10,000 per annum.

Mr Bean added: “Whilst care in itself is expensive for many, the so called “hotel costs” are in reality what a lot of people need to spend their money on.”

The Equity Release Solicitors Alliance has produced a longer blog on the issue available here.

To find out more about Gaby Hardwicke please visit their website.

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