How do we pay for social care?

Date Published: 11/09/2020 11:08

All this talk about how do we pay for Covid-19, but the issue of how do we pay for social care has not gone away, says Jillian Thomas.

So just how do we pay for social care? It is an issue that is close to my heart. I have an elderly mother who needs support. I too, like many of you I am sure, also think about how my own situation will be in the years ahead.

Latest figures show that 45 per cent of people in the UK cover the total cost of care homes, with another 12 per cent of people paying but having some ‘top up’ by local authorities. A care home can cost up to £1500 a week. How can we afford that as individuals and as a society as the population ages? And how can we afford to pay for social care for those who are able to stay at home?

By 2040 it is predicted there will be 10 million people over the age of 75, with one in five of us getting to 100. (The monarch will be busy signing all those birthday cards!)

A few weeks ago the press was full of stories saying over 40s will have to pay more tax or national insurance or be compelled to take out insurance. The idea, backed by Health Secretary Matt Hancock, is being examined by Boris Johnson’s new health and social care taskforce and the Department of Health and Social Care.

The proposals are similar to what already happens in Germany and Japan. In Germany everyone pays towards their care costs as soon as they start working, and pensioners contribute too. Currently 1.5 per cent of every person’s salary, and a further 1.5 per cent from their employer or pension funds, is ringfenced to pay for social care. In Japan everyone starts contributing from the age of 40.

Exactly how it could work here is being looked at. Would it be through payroll tax or insurance? Whichever way, experts say any insurance model would have to be compulsory to make sure people contribute.

In the mean time, as financial planners we know there are ways of helping with care costs and we can advise on various products, such as an Immediate Care Plan. But in terms of the overall cost to society what can we do? The Local Government Association estimates a £2.6 billion gap in funding for adult social care.

One thing is for sure, social care and care homes are never far from the headlines. Since the outbreak of Covid-19 care homes have very much been in the spotlight.

Introducing a comprehensive and reliable system like that in Germany and Japan would “arguably [be] an appropriate act of national atonement after the catastrophic loss of life we’ve seen in care homes during the pandemic”, says Caroline Abrahams from Age UK.

I just know that the system of funding social care and care homes needs an overhaul. After all, we all want to live as long as we can, and in the best way we can.

If you want to advice about care planning please contact us on 01246 435996.

This article first appeared in UnLtd magazine.


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