LSE: Care home residents projected to be £60 a week better off on average under new long-term care plans

English care home residents in 2028 are projected to be on average £60 a week better off under the government’s new long-term care funding reforms than under the current system. And home care users are projected to be £20 a week better off. The average gain for people in the highest income quintile is projected to be £72 per week in 2028, whereas for people in the lowest income quintile it is projected to be £21 per week.

These are some of the key findings from a new report published by the NIHR Policy Research Unit in Adult Social Care led by the London School of Economics and Political Science (LSE), in partnership with the University of Kent and King’s College London.

The report, Reforming the funding of adult social care: Costs and impacts of the government’s proposal, analyses the government’s recent Build Back Better long-term care funding reforms. These reforms will introduce a lifetime cap on how much individuals must pay towards their care and increase the level of savings they can hold before they lose state help with their care costs.

Currently, those with capital above £23,250 must meet all their care costs without state support. The lower capital limit is £14,250. Under this amount, people don’t have to cover any of their care costs from their capital but usually have to contribute from their incomes. Those with capital in between these amounts must contribute to the cost of their care from their savings and incomes.

Under the reforms, due to be introduced in October 2023, this upper limit will be raised to £100,000 and the lower limit will be raised to £20,000.

In addition, the reforms will see the introduction of a lifetime cap of £86,000 on how much individuals will have to pay towards their care, with progress towards the cap based on the amount users contribute to their care cost.

Alongside the finding that care home residents and home care users in 2028 will be better off under the reforms, the research found that public spending on long-term care for those groups is projected to be £2.3 billion higher in 2028 and £3.2 billion higher in 2038 (in 2018 prices) than under the current system.

The report comments that these new plans are more generous than plans previously proposed by the Coalition government (but not implemented) on long-term care.

The report’s findings are based on a set of assumptions about future socioeconomic and demographic trends.

With around 700,000 older people in England receiving long-term care in 2018, the findings of this report and the new reforms will have a significant impact on a large sector of the older population.