The Tory manifesto pledges on social care funding have been dubbed a ‘regional lottery’ that could see those in London and the South East lose two-thirds of the value of their homes before receiving government support.

According to Royal London, changes to rules on social care announced in the Conservative manifesto could mean more families will see their family home put at risk from the costs of long-term care.

What will change?

The good news is that the threshold for care is increasing from £23,000 to £100,000, meaning the Government will provide free care for those with less than £100,000 of assets.

But the bad news is that the Tories propose to include the value of your home in the means test for those who receive care at home (although you will be able to defer payment until after your death). At the moment the value of your home is ignored in the means test.

Of course most homes are worth more than £100,000 – in some parts of the country significantly more – and with no cap as to how much you could pay, some face a potentially huge bill.

Postcode lottery

Royal London looked at average property prices around the country and how much of the value of their home people would be expected to pay for care before the Government stepped in.

It found that across England as a whole, more than half the value of a family home would have to be spent before the Government stepped in. For those in London, nearly four-fifths of the value of a home could go in care costs before free care became available – an average £371,742.

Those in the North East would pay less than one-fifth of the value of their home – an average £22,298.

Steve Webb, director of policy at Royal London, said: “If these changes are implemented, more families will be at risk of seeing a large part of the value of their home wiped out by care costs later in life. Without an overall cap on care costs, those who need care for a long period of time could see more than half the value of their home taken by care bills. Paying for care looks set to become a regional lottery.” 

Steven Cameron, pensions director at Aegon said those with large assets could pay hundreds of thousands of pounds if they need long-term care, while others would benefit. “Compared to the current system, pensioners needing residential care will benefit from being allowed to keep £100k rather than the current £23,250. This will be particularly welcomed by those with relatively modest assets in later life.

“But previous proposals to cap total ‘eligible care’ contributions at £72,000 would have offered far greater protection to those whose assets are well above £100k. This group could still face paying care bills of hundreds of thousands if they need care for lengthy periods.”