A recent magazine article carried the observation that cooking is the transformation of uncertainty (the recipe) into certainty (the dish) via fuss. Adapting this to the issue of UK social care policy, there has been no shortage of fuss – yet individuals, carers and industry have little or no idea of the likely ‘dish’ that will emerge when the government’s green paper is published.

Reducing the uncertainty and fuss

Though the comparison is a little flippant, the issue is not. The UK’s population is ageing and ageing at a faster rate than ever before. Analysis by LaingBuisson shows there are over 421,000 older people and people with dementia aged 65+ living in residential care. For these individuals and those that follow them into care, the proposed funding framework will be crucial to delivering security and peace of mind for them, their carers and their families.

This point was recently confirmed by a Competition & Markets Authority interim market study into care homes, which found that people are struggling to make informed decisions about care. This is a particularly important issue to address given the fact that these decisions are often made under stressful and time-pressured circumstances.

Fundamental issues for the Green Paper

Whatever the outcome of the Green Paper the government will need to address fundamental problems in the current system. First, that just a few years of care can eat up even a sizeable estate. It’s almost impossible to know how long a person will need care – which can result in the catastrophic loss of an individual’s assets. Second, the new proposals should look to incorporate an equitable way of pooling risk for those who need residential care – a point which the Dilnot Commission suggests most people accept as a way of managing unknowable care costs. 

Crucially, the government also needs to take meaningful steps to raise awareness of the reality of care costs. Though the coverage of social care funding during the election campaign brought the issue to the forefront of the debate, it didn’t do so in any illuminating or useful way.

Who pays for what?

Our own research found nearly one third (32 per cent) of people aged 55+ believe councils pay most of the cost of residential care (with individuals topping up the rest), while four in ten believe individuals pay most (with councils topping up the remainder), even though their share is likely to be much higher. With residential care costs ranging between £28,000 and £78,000 per year depending on the level of support needed, the type of care requested and where the individual lives, this disparity between public perception and the reality of care costs must be addressed.

The government could make an immediate positive impact by recommitting to the awareness campaign that was set out to accompany the Care Act, to build awareness, develop comprehension and show people where to find information and advice. This campaign could usefully highlight some of the options and services already available, for example, including the option to apply for a Deferred Payment Agreement and availability of improved local authority referral services to professional advice firms.

This last point on the value of professional advice services doesn’t get the attention it deserves. Just is among a number of UK providers who are developing innovative ways to help people meet care costs. Our solutions give customers security and the peace of mind by providing regular payments towards their care costs that continue as long as they need them. With the CMA interim market study suggesting many people struggle to get the information and advice they need to navigate their care options, promoting access to professional advisers will help individuals find appropriate solutions and also stimulate demand-led competition and innovation in the care market.

Housing equity

A further major consideration is how people can make use of housing equity to meet later life care costs. Over £2.3 trillion of equity is held by homeowners aged 50+, which can be used to positive effect to meet care needs. We are interested in developing a home equity ‘pledge’ policy that would allow individuals to commit a proportion of their housing equity to meet care costs in later life, if required.

In addition to raising awareness we must also find solutions to overcome the behavioural biases that discourage some people from handing over money today for an eventuality that may not occur in the future. We think it may be possible for the government to offer incentives to people to motivate them to pledge some of their housing equity towards provisions for future potential care costs. No money would be handed over – instead some equity would be ring-fenced for future use, should it be required. This is not a death-tax, nor a deferred payment agreement, but a way to achieve some peace of mind to homeowners and their families who may need to pay for care in the future. 

So if we are to ‘do care differently’ – and do it well – we need measures to improve public awareness of care costs and the good options available to help people meet these costs. With these needs urgent and growing, the government must build cross-party consensus to implement policies and a solution to bring clarity for vulnerable people and their families.

The views expressed in this blog are those of the blog’s author alone and do not necessarily represent those of Independent Age. Independent Age is not responsible for the accuracy of the information supplied in blogs by external contributors.

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