Helping you Understand the £72,000 Cap on Long Term Care Costs

There has been a lot of recent discussion surrounding the £72,000 cap on long term care costs. However, there are currently several misunderstandings and misconceptions about how this cap will actually affect, you, the consumer and your long term care needs and expenditures. Advisers are tasked and charged with helping their clients, average consumers, understand the true cost of their future long term care as well as planning out how that care will be paid for once needed. This is becoming increasingly more difficult given that most reform coverage, including the cap on long term care costs, has created more confusion for consumers rather than making concepts more easily understood.

Capping Long Term Care Costs

Given the recent attention to the on long term care costs, most consumers believe that once they have spent their £72,000 on their own care, their local authority will pick up the tab for the rest of their future costs.  However, this is not always the case. The major reason for this misconception is that the cap really only relates to care costs and not to other costs, such as those required for general living such as food, comfort costs, or accommodations. By taking those costs out of the equation, you as the consumer are far less likely to reach the cap. Care costs are less likely to reach the cap for long term costs independently.

Secondly, the cap on long term care costs is only corresponds with the local authority’s rate. That means that the cap does not correspond with the full actual cost of care. You may find, along with other everyday consumers, that you are paying much higher than the local authority rate but yet you will still have to budget for more considerable care costs. Some consumers may end up finding that state funding will not step in and pay for their care costs until they have been paying the bill themselves for years. Some consumers may wait five years or more before any state help steps in to help offset the costs of their long term care.

Seeking Financial Advice

If one thing should be taken away from the confusing nature of the new reform on the cap for long term care costs, it is the reinforcement of how important financial advice is for consumers who are trying to figure out how to fund their long term care expenses. Most consumers will need help understanding the reform and how it impacts them as well as how to budget for future anticipated expenses. This means seeking the right financial advice to get the support needed to make these important decisions.

You should stay educated as to how the cap on long term care costs directly affects you and your family. That doesn’t mean just anticipating when state assistance will kick in but it also means budgeting as best as you can, even after you think the cap may kick in for your individual care. Many consumers are finding that the reform is convoluted and confusing. With something as important as long term care, you should not wait to find the answers to your specific questions.

You should become as educated as possible by seeking appropriate financial advice. If one thing is to be taken from the current understanding of the reform, it is that most consumers are exceptionally confused about the cap on their long term care costs and they need as much professional advice as possible. You can’t make appropriate decisions for today and in anticipation of tomorrow without getting the right financial advice.