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The New Care Home Funding - Apparently It Will Create New Financial Products

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Watching the BBC this morning and they where talking about the funding overhaul for social care and the guy from radio 4 Paul Lewis I think and he was saying because the govt has capped the maximum amount that can be contributed to your prole care in old age the insurance companies will be able to create exciting new financial products to sell.

Looks like the govt is doing all it can to help the proles put more money into the City and boost it's bonus pool.

He did mention that if you had got say £15k then there would be some insurance companies that would take the money off you and pay your fees if you went into care.

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I've submitted 2 posts about this report in the past 2 days, both of which have simply died without a trace.

I believe this is a fundamental report for house prices. For a while I've been expecting old people to have to sell up / downsize, which would put downward pressure on house prices. Because the wealth of old people must be defended at all costs, this must not be allowed to happen. Hence this report.

Mr Dilnot told BBC Breakfast the changes would cost the government around £1.7bn a year if they were implemented now but this figure could rise by 50% as the "baby boom" generation begin to retire.

Not content with raping our country of all the tax they spent, and all the tax their children spend, and putting their children's children in debt, boomers now want to be protected from the fact that they haven't saved for their old age.

If we are to cap spending how do we know the burden won't fall on the state? I think this will, meaning we gold-plate the boomers into a gold-plated coffin. More debt loaded onto the next generation.

How about for the first time in their lives the boomers balance the books and pay for their own care, even if, shock horror, they have to sell their house. If they are protected from selling this is going to keep house prices higher and once again see the state artificially supporting house owners, just like they do through interest rates and rent for people on benefit.

Why do students have to cover the full cost of their uni now but boomers get covered? Because the government know they have the block vote and they always vote to enrich themselves!

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My house is my pension! I've changed my mind!

Did I hear correctly that you will be allowed to have £100k in cash but an unlimited value to your house.

So the only people who'll actually have to pay anything will be those with over £100k in cash?

Surely then you could just trade up from a £200k house with £300k in the bank to a £400k house with £100k in the bank and get state provided care for free?

Your kids then get a huge inheritance and the taxpayers pick up the tab.

This is very bad news for HPC.

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wait a sec, so now you are not saving for a pension, but work till you drop, your prize is a retirement in bed drinking liquefied roast dinner. I see now, once I had thought not allowing someone to die in dignity when your body is an empty husk was some sort of Christian hang up, now it seems its purely a financial product to be milked dry.

Society as it stands horrifies me.

Edited by pathfinder

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Did I hear correctly that you will be allowed to have £100k in cash but an unlimited value to your house.

So the only people who'll actually have to pay anything will be those with over £100k in cash?

Surely then you could just trade up from a £200k house with £300k in the bank to a £400k house with £100k in the bank and get state provided care for free?

Your kids then get a huge inheritance and the taxpayers pick up the tab.

This is very bad news for HPC.

The costs of running a big house are most unattractive. That heating allowance isn't going to go far in a 6 bedroom place.

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The costs of running a big house are most unattractive. That heating allowance isn't going to go far in a 6 bedroom place.

Doesn't have to be a big place - nice 2 bed penthouse (with lift) by the sea would do me.

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Surprised Lord Hutton isn't behind this one.

Not content with creating a new financial industry on the back of higher education, the banksters wish to create more products from the care home 'market'.

We all know what finance does to a market.

It will be healthcare and secondary education next, all thanks to the deficit hysteria.

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Did I hear correctly that you will be allowed to have £100k in cash but an unlimited value to your house.

So the only people who'll actually have to pay anything will be those with over £100k in cash?

At the moment, people with assets, including the value of their house, of over £23,250 pay for all their care.

The commission says this should be increased to £100,000 to better reflect the rise in property value seen over the past 20 years.

where'd they say that?

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Actually the majority of savings in terms of number of savers and amount of money saved is concentrated in the 55+ age range so they have saved, but I suspect this is more about putting a higher price on the cost of care and removing what it can from the Govt liabilities.

I'm well aware that all the wealth is concentrated in this age band. They haven't saved in a sustainable way. They have taken money out of the public purse and via generational wealth transfer as they pay a low mortgage on a second property and rent it out to youngsters at a huge margin, all underwritten by low interest rates and a debt mountain. And now we have to pay to keep them alive so they can die with a massive wedge. As usual we have to have a cap because the sums just don't add up, just like defined benefit pension schemes.

It's not like increasing life expectancy is a big surprise. Will anyone ever take responsibility for looking after themselves?

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Individuals will have to pay the first £35,000 of the costs of a care home place, or help in their own homes with tasks such as washing and dressing, under the plan.

After reaching this cap, the state will step in and cover any care costs above this level.

Is this about care or about propping up house prices?

Surely the solution is for loans to be secured against people's houses and paid off through selling the house when they and their partner die or move into permanent residential care an hence by definition don't need their house anymore. Why is this so unthinkable?

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where'd they say that?

So the least you can end up with in assets and cash is £100k and the most you can pay out is £35k.

Should the inheritance tax bracket not move down to £100k to reflect this?

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So the least you can end up with in assets and cash is £100k and the most you can pay out is £35k.

Should the inheritance tax bracket not move down to £100k to reflect this?

i wonder if that excludes assets within a pension wrapper; my initial guess is 'it would have to' otherwise it penalises those on defined contribution pensions (who have a tangible figure of money in their pension) compared against those on final sal (who if getting, say, £10,000 per year pension, have an equivalent capital value of c. 250k, but not explicitly stated anywhere)

so let's assume (and please correct me) that a pension wrapper, ie an annuity that cost 250k+ to buy, giving a fixed income, does not count

that would make owning a home, in these terms, very tax-inefficient, no make that extremely tax inefficient

IF (a big IF) this is the case it could be a long term dampener on house prices, one of those stealth taxes that gets brought in after an asset has had a good run and everybody ignores it because the party isn't quite over yet

maybe

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Is this about care or about propping up house prices?

Surely the solution is for loans to be secured against people's houses and paid off through selling the house when they and their partner die or move into permanent residential care an hence by definition don't need their house anymore. Why is this so unthinkable?

Yep, this is what I don't get.

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Yep, this is what I don't get.

I'd imagine it's because they want to shore up support for their parties and the boomers, by definition, have the block-vote, and by happy coincidence always vote in their own narrow vested interest. I really hope this does not go through in such a way that it leaves the next generation with an even bigger bill to pay.

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I'd imagine it's because they want to shore up support for their parties and the boomers, by definition, have the block-vote, and by happy coincidence always vote in their own narrow vested interest. I really hope this does not go through in such a way that it leaves the next generation with an even bigger bill to pay.

"Mr Dilnot said the money would have to be found by making cuts elsewhere or raising taxes and he said any tax rise "should be paid, at least in part, by those of retirement age"."

hopefully this can be paid for by taxing existing wealth in the elderly agegroup

on the subject of how your house price wealth is treated, under the current system it is complex:

Some assets are excluded from the assessment which is undertaken by the Local Authority. In particular, the treatment of the person's home can sometimes lead to confusion. This asset is excluded if:

  • A spouse or partner still resides at the property
  • A relative who is over 60 or disabled lives at the property
  • A child under 16 lives in the property
  • The care provided is likely to be temporary
  • The person needing care is in the first twelve weeks of needing permanent care

so this totally cvounter my earlier post thinking it would be negative for house prices, there appear to be very easy loopholes.

Edited by Si1

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The problem is that for older people with houses and the next generation that wants to inherit them this will be popular legislation. It doesn't matter that it's unfair, unworkable or ruinously expensive...............if it's popular and can happen, it will happen.

The old get to keep the houses they don't need. The young, who need the houses won't be able to afford them. They'll be caring for the oldies, earning minimum wage, most of which will disappear in taxes. This is all about preventing forced sales as the older generation goes into care. I really hope the country goes so bankrupt that these proposals become unaffordable.

To me it seems totally reasonable that all assets should be considered when means testing for government aid. Those with housing assets should keep them for as long as they need them, but on death or moving permanently into residential care the house should be sold to pay the costs with any residual value going to the estate for inheritance. I fail to see any unfairness in that. It is basically how every other type of state funded aid and benefit works. And it would be immeasurably fairer that the higher education funding arrangements.

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It's not quite as generous as being reported.

The cap will not include so-called "hotel costs" for food and accommodation. However, the report said there should be a standard charge which could be around £7,000 to £10,000 per year.

That's all of your state pension plus some extra you have to hand over to the care home, even after you've reached your "cap".

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The reportage of this story on the BBC has been driving me to distraction the amount of times I've heard something along the lines of.

" anything over the cap will be paid by the government"

No it won't. It will be paid by the taxpayer to keep people owning houses they don't need. This is a gift to boomers and gen x at the expense of later generations. It's a quite disgraceful policy.

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It's not quite as generous as being reported.

That's all of your state pension plus some extra you have to hand over to the care home, even after you've reached your "cap".

this is important, and also don't forget that inflation will be eating away at house prices and cash savings all the while

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This is not an attempt by the Governmentt to make things fairer.

They are just telling you that everybody who now choses to get old will have £35K taken from them and given to a financial spiv.

Over the years this money will sadly not provide the required returns - just like other insurance, pension, endowment products etc.

You will be told that unfortunately this is a global problem of people living longer, and you now need to increase the premium to guarantee your continuing level of care. :rolleyes:

It will then be scrapped and a 'fairer' scheme will be introduced.

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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