26th September 2014
Councils are forcing eight elderly people a day to use their homes to pay for long-term care costs, a Freedom of Information request has revealed.
The request, placed by NFU Mutual, shows councils are targeting properties to try and recoup care costs. At least eight people a day have a legal charge placed on their property in order to recoup the costs – since 2009, councils have placed legal charges on more than 15,000 properties around the country.
In some areas councils operate a deferred payment scheme that allows people to keep their home during their lifetime and from 2016 all council must operate this system as part of an overhaul of long-term care that will see costs capped.
The deferred payment scheme will ensure no elderly person has to sell their home to pay for care but the costs will have to be repaid on their death along with annual interest of 4%, eating away at potential inheritance.
Sean McCann, chartered financial planner at NFU Mutual, said: ‘None of us can know whether we’ll need care in later life or how much we’ll have to pay. Even the best financial plan won’t allow you to avoid some costs, but it can help increase how much you leave to your family.
‘There is no one-size-fits-all approach, but there are steps that can be taken to protect your savings. There is some very straightforward planning that can help, especially around pensions and inheritance tax, although with the constant changes to the rules you need to keep your eye on the ball the make sure you don’t pay more tax than you have to.’
Research by NFU found those aged between 45 and 64 were most concerned about old age care costs, with 51% citing this as a financial fear for the future. This was followed by changes to pension tax and reduced income from the death of a spouse or partner.
A fifth of people were worried about poor financial decisions and lack of planning.