Posts tagged ‘Means Test’

The Dilnot Report offers little help

It was thought that the Dilnot Report might help to reduce the cost that individuals have to contribute to Residential Long Term Care, but very little seems to have changed since the last report on this subject.

It looks as if a lot of people will still have their homes sold for Residential Long Term Care unless they plan effectively for such an eventuality.


The Report in Summary

The Dilnot Report is some 86 pages long with a substantial amount of supporting documents, but in short, the commission is saying:

  • Personal Care Costs should be capped between £25,000 and £50,000 with Dilnot’s preference being £35,000
  • An individual requiring care should be expected to pay between £7,000 and £10,000 per annum for “hotel/living” costs
  • Means Test threshold, currently at £23,250 or more should be switched to a sliding scale from £14,250 to £100,000
  • Estate cost approximately £2 billion each year on current care costs.

Some responses to the report have been:the man in the street

  • Too expensive
  • Cannot be taken seriously
  • Dead on Arrival
  • Lukewarm response from The Treasury
  • Pensioners face 2 billion granny tax
  • George Osborne wants to “strangle the proposals”

What it really means

The present proposals would not make much difference, for example, to an elderly lady who goes into a residential care home for four years, before she dies, and has a property worth £200,000 which is sold for the Care Home Fees.

Calculating average Care Home Fees, Personal Care, Hotel Costs, under the new scheme (capping at £35,000 and hotel costs not exceeding £10,000, the family would get £125,000 after all bills are paid.  Under present rules they would also have had to pay the council’s costs, so would receive £92,000.


The problem is getting bigger as we get older

Many who have to consider Residential Care Home fees have worked hard all their lives, were brought up believing they should save and buy their own home.  The expectation being that the “state” would care for them in their old age, and they would be able
to provide for their children and grandchildren.  Over 20,000 homes were sold last year to meet Care Home Fees costs, and this is only going to increase with an ever-growing elderly population.

Protect your home with professional planning

With proper planning these costs can be reduced, provided you have a professionally drafted will which includes the appropriate trust.  Or alternatively by setting up a Life Time Property Protective Trust (LPPT) you would be able to protect your house
from being sold and ring-fence your assets if you so desire.

The purpose for establishing a LPPT are manfold, and some are:

  • No Probate fees on the value of the property/assets in the Trust
  • No claim against the Trust can be made upon your death
  • Protecting the family assets from potential bankruptcy of beneficiaries
  • Financial protection from relationship failure

A side effect of a LPPT is that your property/assets are protected from being taken to pay for your care.  The LPPT offers effective protection from care fees provided that at the time the assets were protected it was not reasonably foreseeable that you would need to go into care.

Guest Author: Eric S Britt. Will Writer and Estate Planning Practitioner. Affiliated Member of The Society of Will Writers  Call 01480 270114 or Email: for a confidential, no obligation review of your circumstances.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

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