Three out of four people whose parents go into a care home lose all or most of their inheritance, a report claims. Hundreds of thousands have seen the savings and property value amassed by their parents rapidly drain away due to the high cost of care home bills. Care costs mean large numbers of families will never benefit from the longstanding Tory promise that those who save will see wealth ‘cascade down the generations’. Hundreds of thousands have seen the savings and property value amassed by their parents rapidly drain away due to the high cost of care home bills. The study, carried out for the NFU Mutual insurance group, found as many as two million elderly have had to use their savings to pay for care over the past five years.
It estimated that over the same period a million homes have been sold to cover bills under the system by which anyone with property or savings worth more than £23,250 has to pay for their own care. The figures follow the Government’s promise earlier this year to bring in a £75,000 cap on the amount needed to pay for care bills. However the cap will not be introduced until 2016 and will not include £12,000 a year calculated to be spent on accommodation and food costs. Sean McCann, of NFU Mutual, said: ‘Younger generations could be in for a long wait if they are banking on an inheritance to fund their own 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.’
The study found as many as two million elderly have had to use their savings to pay for care over the past five years. The report reveals nearly one in five of those surveyed said a parent or in-law had needed residential care. Of these, 77 per cent said the parent’s wealth had been eaten up by the expenses involved. Nearly half said their parent’s care had been paid for from savings and 28 per cent said the family had to sell their parent’s home to meet bills. The estimate that a million homes have been sold to meet care costs over five years is higher than usually accepted. All estimates are guesses as no official figures are kept, but charities, pressure groups and Whitehall work on the basis that between 40,000 and 70,000 people a year sell homes to meet care costs.
Elderly and vulnerable people with no property of their own and assets of under £23,250 get state help to pay their care costs. The bills are paid by local councils. The Tory promise to let wealth ‘cascade down the generations’ was made by John Major in 1991. Around the same time the benefit system was altered to compel savers to use assets and homeowners to sell houses to meet residential care costs. We have become a ‘neglectful’ society where many pensioners live lonely lives, a minister has warned. Care minister Norman Lamb said the increasingly dispersed lives of families meant many of the elderly had little human contact at all. ‘There are so many living sad and lonely lives, with no one even seeing them,’ Mr Lamb said. ‘We have ended up rather a neglectful society as far as these individuals are concerned.’
