Jo Farrow: Time for urgent rethink on social care costs

Do the Baby Boomers have a better deal than Generation X?

Are Millennials more sensitive than their forefathers?

Will Generation Z ever be able to afford to retire?

Whatever the answers to these myriad questions, one thing, common to all generations, is that ultimately, they will grow old; their homes and jobs supplanted by their children and grandchildren.

This may seem a gloomy thought, especially to those of us for whom retirement is but a distant dream.

In reality, it’s hugely optimistic.

Thanks to medical advancements, reducing infant mortality and improving elderly care, for most of us a long and healthy life is not a gift, but an expectation.

In 1901, the average life expectancy in the UK was lower than 51 years of age, today, we can expect to live into our early 80s.

It’s a remarkable leap and, of course, it is to be celebrated.

But as we’re so often reminded, the so-called “ageing population” is not without risk.

Local authorities are in crisis across Yorkshire, they’re levying extra funds from council taxpayers to pay for adult social care; auto-enrolment pension schemes have been introduced to tackle future shortfalls in state pension funding; and, against much opposition from the WASPIs (Women Against 
State Pension Inequality), the Government has increased the state pension age to 68.

The overwhelming “cost” associated with ageing, of course, is social care, whether care homes, house-calls or sheltered accommodation.

In recent years, the adult social care system has been subject to endless debate, not least the long-anticipated Dilnot Report, released in 2011, which recommended a cap on the lifetime contribution an individual should make to their care.

Plans to introduce this were scrapped in 2017, meaning generations of pensioners could see their entire estates gobbled up by astronomical care costs.

There’s another pernicious discrepancy at the other end of the spectrum.

The threshold at which people must contribute to the cost of their care has not increased since 2010/11.

It means that pensioners with assets valued at more than £14,250, must contribute to their care costs, while those with savings of more than £23,250 must bear the full cost of their care.

In the time period, personal tax allowances have almost doubled. In real terms, this means that the thresholds are 12 per cent lower now than when they were set.

To the untrained eye, this may seem fairly inconsequential, but in reality, it means financial hardship and potentially, more families forced to sell their homes to pay for care.

We all know that local authorities don’t have access to the now proverbial “magic money tree”, but these thresholds need to be more generous in order to make a meaningful difference to a greater number of families.

Social care and the “ageing population” more generally, need a rethink.

We can’t keep passing the buck further and further down the line, effectively dooming the future generations to greater and greater financial burdens.

And we must ensure that discrepancies, at either end of the scale, which disproportionately impact families, are ironed out in future changes to the system.

Jo Farrow is an associate solicitor at Lupton Fawcett LLP in York.