Summary: The figures for those needing care under the Tories new policy are much more worrying than first thought. You can only release up to 35% of the current value of your home. If your home is worth £150,000 then you can raise £50,000 and get under the £100,000 inheritance limit. However if your house is more valuable, you cannot release enough capital to get under the £100,000 limit. If your house is worth £180,000 say then raising the maximum £60,000 means the part you own is worth £120,000. This is over the limit. Once you have spent £60,000 on your care the only way to raise the additional money you need for your care is to sell your house, even if you live in it. This makes you homeless! Anyone with a property worth over £150,000 will be essentially forced to sell it if they are to get the care they may well need.
Teresa May’s Tories want to introduce a method of making everyone pay for their own care should they need it at home until their total assets, including the value of your house is under £100,000. Imagine you are a pensioner on the state pension with modest savings. You need care at home. You can manage pretty well and want to stay in the home you may have lived in for very many years. It is expensive, typically £16 – £25 per hour in your own home. One hour morning and night works out at £18,000 per annum, which many people simply don’t have. You want to raise the money the government insists you provide for your own care, so let us imagine the home you live in is worth more than £150,000 which is true for the vast majority of homes occupied by pensioners. If your home is worth more than that then things are simply worse for you.
With equity release you can raise only about 35% of the value of your home. This will give you perhaps £50,000 or a bit more. Your home will then be worth more than the £100,000 inheritance limit the Tories are insisting on. Once you have spent all the money raised by equity release, what can you do? You must raise more as your assets are still worth more than £100,000. All you have is your house, the home you live in. All you can do is sell it, making yourself homeless.
Essentially, the policy that Teresa May proposes is to throw you onto the street within a few short years (could easily be as short as two years) of you first needing care in your own home.
Not very fair, and rather terrifying for an elderly person with no other help available.
Suppose you are stricken with something like dementia, Parkinsons disease, multiple sclerosis, all conditions likely to need many years of care. The Tory policy virtually guarantees you are made homeless before you are ill enough to justify residential care, itself in very short and shrinking supply.
That is what Britains pensioners are to be rewarded with after a lifetime of hard work, paying their taxes, struggling to buy their own home and contributing in so many ways to making society work.
Simply not fair at all.
Teresa May wants to create a country fair to all. This dreadful approach to providing care for the elderly will be a massive, unprescedented stealth tax on your hard earned savings. Deeply unfair in so many ways.
Labour wants to use a different approach, putting a cap on how much anyone has to pay for their own care. Proposed by an independent review, and much fairer to all.
If the Tories win this election this terrible attack on the elderly will be unstoppable.