I welcome today’s publication of the Dilnot Commission’s report on the future funding of adult social care. The current system creates great uncertainty and worry about the future because it is confusing, unfair and unsustainable. People can’t protect themselves against the risk of very high care costs and risk losing all their assets, including their house. Someone who has lifetime care costs of £150,000 could lose up to 90% of their accumulated wealth. Under the proposed system everybody who gets free support from the state now will continue to do so and everybody else would be better off. Putting a limit on the maximum lifetime costs people may face will allow them to plan ahead for how they wish to meet these costs.
The ‘partnership’ model it recommends strikes a fair balance between individual and state and ensures that the highest costs, which frequently occur at the end of life, will not fall on individuals and their families. This combination of a cap and the higher means-tested threshold would ensure that no-one going into residential care would have to spend more than 30 per cent of their assets on their care costs. The private sector should now be able to develop affordable products while shielding individuals from potentially financially catastrophic costs.
An achievable timetable has been set which must culminate in a White Paper by next Spring at the latest and I urge all interested parties to engage in the proposed working group of central government, local government, the financial services industry, the Financial Services Authority and interested third-sector organisations to consider how to enable the development of an effective market which supports consumers in making sound choices.
Overall a window opportunity has opened but some challenging communication, and advice issues remain to be resolved. Importantly however concerned older individuals should not wait until next Spring to act but rather should seek advice now as to how these changes could impact for better or worse their health and financial outcomes in old age.