Martin Wilcocks


I write further to my last posts, on the ongoing national care system ‘car crash’ – that is becoming worse all the time – due to the boom in post-war population growth in the last 70 or so years, combined with healthier living standards, and massive advances in medical science.

As it stands we are in exactly the same place we have been for years. The system is crumbling beneath us. And to make matters worse the first tranche of our ‘baby boomers’ born in 1946, started to retire a couple of years ago. And we now have another 20 or so years of these post war imminent pensioners on the retirement radar.

Just to add a further ingredient we are living far longer than previous generations, and we don’t die when contracting serious illnesses. Doctors are keeping our elderly retired population alive. And somebody, somewhere, or something needs to pay for it. And it’s getting more and more expensive all the time. Does the Government have the capacity to cover the bill? In a word – no.

I see, and read nothing at all, to convince me that we will be given a fairer system, and one that protects people who have been careful with their money in retirement.

Neighbours who have lived next door to each other, worked in the same mill, factory or office, earning similar levels of income, will turn up at the door to the care home, and they will be means tested in the same way. At least that’s fair. But what happens next certainly isn’t.

Let me explain what happens next by way of an example.

John and Jane lived a quiet retirement, spent little on themselves and their family, instead choosing to keep hold of their savings for a ‘rainy day’. They were careful and wanted to make sure they had enough money to protect their future needs.

Neville and Samantha (next door), went on lavish lush holidays, went to their favorite restaurant twice a week, took their Grandchildren there too on a Sunday, and they looked after their family – by way of small gifts. They spent their money and enjoyed their retirement. When the savings ran dry they even took out an Equity Release to ‘top up’ their bank balance ! And went to Barbados !

John and Jane used to look on, with nodding heads, and say ‘they must go through some money’. And they were right. They did.

The Local Authority will strip John and Jane of their savings, take the equity within their home, and any other property or assets, to cover the ever increasing costs to support them in their later years.

Neville and Samantha will take the same rooms, next door to them, in the same home. For free.

Our retired folks savings have been absorbed by our care system, over the last few years, on a level like you would not believe.

20000 homes on average have also been sold every year, for the last 3 years. That’s around 60 every day of each year. That’s 60 Sons and Daughters who aren’t inheriting the assets that their Parents Wills were due to distribute to them. Every day!

We also know that over 100,000 people, with serious medical needs for nursing care, have been wrongly assessed and forced to pay for their own care, ultimately by under pressure Local Authority bosses, with a remit to collect what they can, when they can. The NHS should be picking up these bills. But it isn’t. And as a result thousands of Sons and Daughters are now in the courts claiming these fees back from our Local Authority’s.

Average care costs currently vary between £400-£900 per week. Annually that can be around £20,000 – £50,000 and anybody going into care, without significant nursing needs, with assets – including property and savings above £23250, will be paying their own way. Full stop.

The £70,000 cap on care costs – as positioned by Andrew Dilnot, within his report, fails to solve the problem and the system remains completely unfair. The system hits ‘Mr and Mrs average’. There are so many sub clauses and caveats – and from what I can see, they are all geared to protecting the Local Authorities income stream.

Retired people, of average means, all over the country, have been mis-sold on how the new cap on paying for care will work, and the premise that they will not have to sell their homes borders on blatant dishonesty. All the new rules would mean is that the property would be sold after death. So families will continue to lose out, just as they do now.

The cap will also not cover accommodation, food and other personal costs, and the Dilnot report has been put on the ‘backburner’ in any case – until after the next election. At which stage they will revisit the findings. Just to re-cap, Tony Blair promised to fix the system in 1997, when he was elected into power. He didn’t. He couldn’t.

So as far as I can see, nothing much will change, and it’s clear to me that the Government have spun the Dilnot report into a marketing exercise – an exercise to dupe the public into believing their homes and savings will be largely protected, with only a proportion being used to contribute. I don’t buy it.

Our survey says “Nnn Nnnnn”

My Estate Planning Quadrant (EPQ) videos can be viewed here;

EPQ1 (video 7 in the playlist) is me explaining this problem live.

Fortunately within my ‘tool box’ I have the solutions. Solutions that ensure hard earned family capital and assets ultimately pass to Children, or other beneficiaries, tax-efficiently, minus the costs, delays and issues that can arise through and with probate.

If you’re concerned about your estate planning, don’t hesitate to get in touch with me for a no-obligation chat.

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