Written By Coreena Dutton
South-West-based Society of Later Life Advisers Accredited Chartered Financial Planner Coreena Dutton discusses the impact of Labour’s social care reform cuts ahead of the upcoming Autumn Budget statement on 30th October 2024.
Whilst we cannot always anticipate future care needs, proactive planning is essential to avoid being unprepared for the potentially high costs of care.
This is even more prevalent following the recent announcement by Chancellor Rachel Reeves to scrap the previously proposed cap on care costs.
Initially set to be implemented in October 2025, the proposed cap of £86,000 would have provided a much-needed safety net to alleviate the financial burden on individuals who require social care.
It has been reported that the average weekly living costs in a UK residential care home is £760, and £960 for a nursing home, totalling between £39,520 and £49,920 per annum (Care Home, 2024), therefore, fees can rapidly add up to a considerable amount, especially for those who may require care for several years.
Understanding The Impact
The immediate impact of this decision therefore leaves many asking how they will fund their social care needs in the face of rising costs and ongoing economic uncertainty. This abrupt reversal has also been met with widespread criticism from various experts, economists and charities, who are advocating for more stable care funding models.
Furthermore, the scrapping of funding reforms may further hinder local authorities’ abilities to support individuals needing care. As councils struggle to manage under increasing financial pressures, families may face longer waiting lists and reduced availability of essential services.
Options for Funding Care Costs
Care fee annuities or long-term care plans have recently increased in popularity, which allow individuals to pay a lump sum in exchange for a guaranteed income, paid tax-free to the care provider for the rest of their lives. This can help mitigate the risk of escalating costs and provide additional security for future care requirements.
It is also important to consider asset protection strategies, such as trusts, protection policies or other estate planning tools, which can help safeguard wealth and ensure you can cover the costs of care without depleting family resources.
Whether you are planning for your own future or have a family member who may soon require care, engaging with an expert Independent Financial Adviser can offer peace of mind. We can develop a personalised strategy to mitigate financial risk, and ensure that you or your loved ones receive the quality care needed.
If you would like to discuss your family’s arrangements for funding later life care costs, please do not hesitate to get in touch with an Integrity365 Independent Financial Adviser on 0117 450 1300 who would be happy to explore your options.
For more information on Financial Planning for Later Life Care, download our PDF guide below:
Written By Coreena Dutton
