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1M Forced To Sell Their Home To Pay For Care In The Last 5 Years

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http://www.telegraph.co.uk/finance/personalfinance/10283259/Elderly-care-crisis-claims-a-million-family-homes.html

The estimate, based on polling measuring families’ individual experiences, is far higher than Government projections have previously suggested. But charities and pensions experts said it represented one of the first realistic attempts to quantify the scale of the hidden care funding crisis in the UK.

And they claimed that it showed that the Government’s long-awaited overhaul of the social care system in England – including the introduction of a cap on bills – does not go far or fast enough to address the crisis thousands of families are facing. Jeremy Hunt, the Health Secretary, described the figure as “concerning” but insisted that it served to underline the need for the Government’s reforms. The estimate, in research by the insurance company NFU Mutual, comes less than a fortnight after a separate study found that another two million people – or a quarter of retired home owners – are already actively planning to sell their home to fund their old age.

The new research, including polling by ICM commissioned by NFU Mutual, also concludes that as many as three quarters of people who go into residential care in old age might eventually have to sell their home to pay for it. And it warns that millions of younger people who are currently relying on an inheritance to fund their own retirement could be facing serious financial problems if they do not make alternative plans urgently.

The research also highlighted how more than half of councils have been forced to cut spending on residential care in the last four years despite efforts to shield the sector from the effect of cuts in budgets across the board. It came as the care minister, Norman Lamb, spoke about how Britain has become a “neglectful society” in which it is becoming accepted for the elderly to spend their final years in isolation because of the way families have become dispersed

He said that while the state had a vital role to play in supporting people in old age, it would never be enough unless people also “step up”, providing basic “kindness and companionship”.

Under the current system in England anyone with assets, including their home, worth more than £23,500 gets no financial support if they have to go into a care home. The average cost of a room in a care home now stands at just over £28,000 a year but for those needing more intensive nursing care, annual bills regularly reach well over £40,000. Sweeping reforms of the social care system, based on the landmark recommendations of a commission chaired by the economist Andrew Dilnot, are currently going through Parliament.

They will cap the amount people should have to pay for care at £72,000 – more than twice the level originally envisaged by the Dilnot Commission. It also does not take into account what people in care will have to pay for accommodation nor any money they have paid for personal care before they were deemed frail enough for social services to step in.

Overall officials estimate that only one in eight elderly people will ever qualify for the cap. But, crucially, under the reforms anyone faced with selling their home to pay for care will instead be able to defer the payments by effectively mortgaging their house to the state until their death.

Mr Hunt said: "This Government’s ambitious cap on care costs will make England one of the first countries in the world where people do not end up having to sell their homes to pay for care.

"These concerning figures show how much difference this plan will make to the lives of people who’ve worked hard and saved to pass on an inheritance to their children.”

But Dr Ros Altman, a pensions expert and former government policy adviser on ageing, said: "I don’t think anybody has properly woken up to the scale of the crisis that we face in social care.

“We have got a pensions crisis because we have millions of people who haven’t enough money saved for their pension – the social care crisis is far worse.

“We have tried to adopt an ostrich approach to this, burying our heads in the sand and hoping but will go away.

“Latterly the Government has tried to do something and it is starting to wake up to the scale of the problem but I don’t it has woken up to the urgency of the situation.

“We are going to have many more years of people having to find tens of thousands of pounds a year to pay for their care.

“Families have got to realise that whether or not they will inherit money might well depend on the lottery of whether they end up needing care.

“It is a lottery depending on what is wrong with you and where you live which means that you could get all of your care funded by the state or none of it and you won’t know in advance.”

Overall one in seven people polled were clinging to the belief that they will be able to supplement their pension with income from an inheritance even though that could be wiped out by care costs.

Of those more than three quarters said that almost all of their parent’s assets, including their home, had been eaten up by care expenses. Overall it estimated that 1.1 properties across the UK have had to be sold in the past five years to pay for care. Regularly quoted Government estimates claim that only around 40,000 people a year in England have to sell the family home to pay for care every year – or 200,000 in five years. But the Government figure is based largely on the numbers who go into care homes with only enough savings to last a few months and do not include those who sell their homes first.

The higher estimate by the NFU Mutual is echoed by recent research by the Prudential which found that more than a quarter of retired home owners are already preparing to sell their family to fund care or general retirement expenses. Sean McCann, a personal finance specialist at NFU Mutual, said: “Younger generations could be in for a long wait if they’re banking on an inheritance to fund their retirement.

“People should be making their own retirement plans rather than factoring in property and wealth that could be whittled away by the cost of care and inheritance tax.”

Michelle Mitchell, director general of Age UK said: “Selling homes to pay for care costs is just one of the many problems of our crumbling care system and these figures underline just how deep the problem is.

“There are too many older people who worry that they will lose everything they have worked for and, as this research highlights, there can be serious financial implications for the next generation too.

“The implementation of a cap on care costs in 2016 should help, but as local authority budgets continue to be stretched more and more older people are having to take on an ever greater share of the burden of funding social care, either through being pushed out of the system because of tightened eligibility conditions or because of higher fees and charges."

Up to £40k a year - anyone know how these costs are broken down?

Edited by Dave Beans

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My mum sold up and is in a retirement home that specialises in her illness - Alzheimers.

It's a bit like a reasonable budget hotel. The accomodation is modern and the care seems good. (St John's ).

I won't inherit a penny.

But the reality is if the elderly have asserts (it's not about houses really, it's about all their assets), why should the state pick up their bill for accomodation?

I think it is fair that the state provides for medical needs somehow - that is humane - but the point of a pension is to provide for your old age. And if you need to go into a retirement home - essentially, rent a home - the house is a surplus, saleable asset.

The problem looming is that there is no point nowadays in saving for retirement, QE and inflation destroys most savings.

Edited by happy_renting

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My mum sold up and is in a retirement home that specialises in her illness - Alzheimers.

It's a bit like a reasonable budget hotel. The accomodation is modern and the care seems good. (St John's ).

I won't inherit a penny.

But the reality is if the elderly have asserts (it's not about houses really, it's about all their assets), why should the state pick up their bill for accomodation?

I think it is fair that the state provides for medical needs somehow - that is humane - but the point of a pension is to provide for your old age. And if you need to go into a retirement home - essentially, rent a home - the house is a surplus, saleable asset.

The problem looming is that there is no point nowadays in saving for retirement, QE and inflation destroys most savings.

Thats what wil probably, ultimately happen...especially at the moment...get a 35 year mortgage, as soon its paid off, you have to sell it to pay for care home bills...

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Thats what wil probably, ultimately happen...especially at the moment...get a 35 year mortgage, as soon its paid off, you have to sell it to pay for care home bills...

And by that time pensions WILL be means tested against assets and you will be forced to withdraw equity to survive. Little point holding property as it can be taxed easily too.

Rent as nicer house as you can, be feckless and stack.

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And by that time pensions WILL be means tested against assets and you will be forced to withdraw equity to survive. Little point holding property as it can be taxed easily too.

Rent as nicer house as you can, be feckless and stack.

...go through life spunking money left right and centre, and most likely the only difference at the end of your life, is the quality of the care home you can get into... :unsure:

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Under the current system in England anyone with assets, including their home, worth more than £23,500

Should be that way with any benefit, really. I dont see how its OK to own a £1mn home outright and have £15,999 savings and get every benefit, but have no house and £16,001 and get no benefits. We should stop subsidising home ownership in this manner.

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For 40K a year I would give up work, claim carers allowance, live rent free with the relative in question and use the local hospital or doctor for medical care when needed. I would then still have an asset to inherit.

Or send them to a care home in India.

Edited by vin rouge

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Thats what wil probably, ultimately happen...especially at the moment...get a 35 year mortgage, as soon its paid off, you have to sell it to pay for care home bills...

....what is wrong with that?.....you can't take it with you, anyway, the people who own homes outright often received equity that just happened to be made, not from hard work but by circumstance, they paid their mortgage sure but most of the value came to them freely, so the care will be in effect mostly free......money and health are quite closely connected...luck with money, luck with health.....money can't buy you health but it can see you have a better end of life care when you can afford to pay for it......why should others pay for it if you have your own money to pay your way in life? ;)

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....what is wrong with that?.....you can't take it with you, anyway, the people who own homes outright often received equity that just happened to be made, not from hard work but by circumstance, they paid their mortgage sure but most of the value came to them freely, so the care will be in effect mostly free......money and health are quite closely connected...luck with money, luck with health.....money can't buy you health but it can see you have a better end of life care when you can afford to pay for it......why should others pay for it if you have your own money to pay your way in life? ;)

Its a bit bloody depressing though...all that blood and toil for all those years, for basically a bigger care home room with slightly better food...

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Its a bit bloody depressing though...all that blood and toil for all those years, for basically a bigger care home room with slightly better food...

....well all you can do is hope you will never need it, then you can spend it if you have it how you wish including giving it to the people you want to, not need to. ;)

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A lot of girls around here work for those new care companies that have the council contracts.Terrible wages and 0 hours contracts.

The good thing though is the girls will on take on private work cash in hand.Then they simply pop in during their rounds.I know a few people who pay the girls cash in hand.Sometimes its only a morning call to get them up and breakfast and medication,,others 2 calls a day.

If you don't need 24 hour care its far better to get a few of these girls coming in cash in hand.

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A lot of girls around here work for those new care companies that have the council contracts.Terrible wages and 0 hours contracts.

The good thing though is the girls will on take on private work cash in hand.Then they simply pop in during their rounds.I know a few people who pay the girls cash in hand.Sometimes its only a morning call to get them up and breakfast and medication,,others 2 calls a day.

If you don't need 24 hour care its far better to get a few of these girls coming in cash in hand.

..so whats the average wage? £8 an hour? Not surprised that care homes are seen as big business..

Edited by Dave Beans

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Up to £40k a year.

I wish, we are paying £52k a year for a nursing home for my relative.

£1000 a week for effectively a Travelodge room and someone to feed, toilet and medicate a frail elderly lady who doesn't know who anyone is and doesn't speak anymore :(

On a more positive side my 90 year old grandad is 100x happier in his residential home than he was living alone in his house. New lease of life

There has to be a better solution for everyone.

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A lot of girls around here work for those new care companies that have the council contracts.Terrible wages and 0 hours contracts.

The good thing though is the girls will on take on private work cash in hand.Then they simply pop in during their rounds.I know a few people who pay the girls cash in hand.Sometimes its only a morning call to get them up and breakfast and medication,,others 2 calls a day.

If you don't need 24 hour care its far better to get a few of these girls coming in cash in hand.

....I agree they pay pittance wages to the carers.....they are not valued enough, the profits go to the middle and top. Most people I agree would rather stay in their own homes for as long as possible and they would prefer to pay people to do the things they are unable to do while living in their own home alone.....the sort of things that their close and extended families used to do for them before families were dispersed all around the country and the world.

....but dementia is something that needs more constant hands on care, so for many that means moving into a home where caring, compassionate and knowledgeable people will specialise in that care....there is no known cure.

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My mum sold up and is in a retirement home that specialises in her illness - Alzheimers.

It's a bit like a reasonable budget hotel. The accomodation is modern and the care seems good. (St John's ).

I won't inherit a penny.

But the reality is if the elderly have asserts (it's not about houses really, it's about all their assets), why should the state pick up their bill for accomodation?

I think it is fair that the state provides for medical needs somehow - that is humane - but the point of a pension is to provide for your old age. And if you need to go into a retirement home - essentially, rent a home - the house is a surplus, saleable asset.

The problem looming is that there is no point nowadays in saving for retirement, QE and inflation destroys most savings.

+1

the concern in the OP's newspaper quote is all about the inheritors

' And it warns that millions of younger people who are currently relying on an inheritance to fund their own retirement could be facing serious financial problems if they do not make alternative plans urgently.

Ros Altman (permatan) is not a good spokesperson for the 'typical old person' :angry:

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+1

the concern in the OP's newspaper quote is all about the inheritors

' And it warns that millions of younger people who are currently relying on an inheritance to fund their own retirement could be facing serious financial problems if they do not make alternative plans urgently.

Ros Altman (permatan) is not a good spokesperson for the 'typical old person' :angry:

Its a bit sad if you have to rely on inheritance to sort out your financial problems (IMHO)...

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My mum sold up and is in a retirement home that specialises in her illness - Alzheimers.

It's a bit like a reasonable budget hotel. The accomodation is modern and the care seems good. (St John's ).

I won't inherit a penny.

But the reality is if the elderly have asserts (it's not about houses really, it's about all their assets), why should the state pick up their bill for accomodation?

I think it is fair that the state provides for medical needs somehow - that is humane - but the point of a pension is to provide for your old age. And if you need to go into a retirement home - essentially, rent a home - the house is a surplus, saleable asset.

The problem looming is that there is no point nowadays in saving for retirement, QE and inflation destroys most savings.

The state wont pick up the tab...it has nothing...it is everyone elses assets that are stripped to pay for the care.

Sort of proves right the claim that my house is my pension.

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Its a bit sad if you have to rely on inheritance to sort out your financial problems (IMHO)...

No, its perfect finance.....it is the very basis of the principle of the vast majority of IO mortgages.

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No, its perfect finance.....it is the very basis of the principle of the vast majority of IO mortgages.

..its a sort of a hope that you want an immediate family member to die ASAP..

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..its a sort of a hope that you want an immediate family member to die ASAP..

.....I am sure your mother didn't think that when she was wiping your bottom. ;)

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..its a sort of a hope that you want an immediate family member to die ASAP..

Whilst death and inheritance are a natural consequence of being alive, the behaviour of expecting something on the Death of a relative leads to some very selfish and dangerous motives. It leads to, as you say, the hope the inheritance will arrive in time to coincide with your financial plans.

One only has to read a little History of the Royal Families, or look at the Middle East today, to see how terribly destructive these motives can be.....

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Some classic quotes in there from Tories who deride scroungers expecting state hand-outs, yet are happy to fund state hand-outs to meet the expectations of the relatively wealthy.

Mr Hunt said:...

"These concerning figures show how much difference this plan will make to the lives of people who’ve worked hard and saved to pass on an inheritance to their children.”

Thank you Mr Rhyming Slang, I'm so looking forward to working hard myself, knowing that my taxes will help those passing on their assets to their privileged children.

"Families have got to realise that whether or not they will inherit money might well depend on the lottery of whether they end up needing care."

Rather than the lottery of whether they were born into a rich family, you mean?

"Younger generations could be in for a long wait if they’re banking on an inheritance to fund their retirement."

It's outrageous, why should the wealthy have to suffer in this way? An inheritance is their birthright, the state must intervene.

The Tories are just comical, they bang on about social mobility whilst doing everything they possibly can to erode it.

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Its a bit bloody depressing though...all that blood and toil for all those years, for basically a bigger care home room with slightly better food...

Look a bit further on though and....all that blood and toil for all those years, for basically the same size grave (or Urn).

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