Article posted: 29 August 2012

The Government has delayed decisions on long-term care.

How to deal with the provision of long-term care for an ageing population is an issue which seems to generate government reports rather than government action. In 1999 there was a Royal Commission investigation and this has been followed by a variety of other reviews. The coalition Government set up its own commission, shortly after coming into power. It was chaired by Andrew Dilnot, a former head of the Institute of Fiscal Studies, who issued his report in July 2011. A government response was originally due to coincide with this year’s Budget, but in the event a White Paper finally emerged from the Department for Health in July, to a chorus of raspberries.

The Health Secretary said that he agreed with the principles set out by the Dilnot Commission for dealing with long-term care in England, but then sidestepped three crucial issues:

• What will be the basis of a new means test for assessing personal contribution levels?
• What will be the amount of the cap on total personal payments for care? And
•  How will any new system be funded?

We now have to wait for the next government spending review (due in late 2013) before answers can start to emerge, so reform is unlikely to occur before the next election.

All of this means that if you need to look at financing long-term care – either now or in the next few years (and perhaps for an elderly relative) – you must take expert advice to ensure that any plan has sufficient flexibility. A rest-of-life solution, such as a long-term care annuity, could well be a waste of money.