Care bill for pensioners capped at £75,000 - but thousands will still be forced to sell their homes

  • State protection against unlimited fees to be introduced for the first time
  • But elderly told to buy private health insurance to cover them to new limit
  • Plans for a cap of £35,000 were shelved after it emerged cost to the treasury would top £2bn

By Daniel Miller for Daily Mail

Pensioners will have their long-term care bill capped at £75,000, it was reported today.

Under Coalition plans, the elderly will get state protection against never-ending care home fees for the first time, but they will have to take out private insurance to cover them up to the new limit.

The reforms agreed by David Cameron and Nick Clegg could be announced next week, but will not come into force until 2015 or later.

Pensioners will still have to pay care bills up to £75,000 with campaigners for the elderly fearing that thousands of families will be forced to sell their homes.

In July 2011, David Cameron's care tsar Andrew Dilnot, recommended the introduction of a £35,000 cap in the amount people should pay towards the cost of their care in old age.

But ministers, including the then health Secretary Andrew Lansley, shelved the plan after it emerged the cost to the treasury would top £2bn.

With the cap set at £75,000, the cost to the Government would be around £700million in 2015-16.

Under the revised plan it is understood pensioners will be expected to take out liability insurance to cover the first £75,000 of their care.

It may mean the elderly facing a choice of having to take a lower lump sum when they retire and converting the rest into care protection insurance.

The threshold for means-tested support is expected to be increased to £1000,000.

Campaigners argue that with the cap set at £75,000 many people would be deterred from taking insurance and would will be forced to sell their homes in order to foot the bill.

In 2011 more than 24,500 people were forced to sell up to cover the cost – a rise of 20 per cent in a decade.

Critics of the reforms fear there may be no limit to the 'hotel cost' of a care home's bill for food, heating and accommodation, according to the Daily Telegraph.

The cap only covers the 'costs of help with washing and dressing.

Self-funders typically spend four years in residential care, with 12 per cent staying there for eight years.

It is estimated that some 171,000 of the 419,000 residents of care homes are self-funders.

Currently, anyone with assets over £23,250, including the value of their home, has to pay their for their own care with costs today averaging around £700 a week.

Ros Altman, Director General of over 50s group Saga has said raising this means testing threshold would be crucial if a cap is introduced.

She said: 'A £75,000 cap is too high, most people won't spend as much as £75,000 and will lose all their money.'

Health Secretary Jeremy Hunt said: 'I want this country to be one of the best places in Europe to grow old and that is why in July we announced the most extensive reforms of care and
support in over 60 years.

'As part of the reforms, we committed to taking action to ensure people do not have to sell their homes to pay for care.'