Malcolm Kyle

Nearly 60 pensioners a day are forced to sell their homes to pay for a place in a care home amid a crisis in provision for the elderly.

By Murray Wardrop Daily Telegraph 09 Nov 2010

www.Telegraph.co.uk

In the past year, more than 20,000 pensioners were forced to sell their houses to meet expensive residential care home fees due to a system which penalises hard-working savers.

Figures disclose that the trend has increased by 17 per cent in the past five years with more than 100,000 having abandoned their homes to pay care home bills.

Under the current means-testing system in England, anyone with assets of more £23,500 – including their house – has to pay in full for their care. Everyone below that figure gets their care free.

Philip Davies, the Tory MP for Shipley who obtained the statistics on which the estimates are based, told the Daily Mail: “This is one of the great scandals of Labour’s time in office.

“People spent sensibly for years and built up savings so they can pass on their home to their children – and now they see it taken off them to pay for care.

“This is possibly the biggest reason behind the culture of people thinking ‘It’s not worth me saving. I’ll spend all I can and when I run out the state will pay for everything’.”

The figures are based on research by health care analysts Laing & Buisson and the House of Commons Library.

They show that at April 2010, around 47,000 had sold their homes to pay for care costs. On the basis that the average care home stay in England is 26 months, it is estimated that between April 2009 and March 2010, around 21,700 sold their home – the equivalent of 59 every day.

Care home fees are around £32,600 a year on average for those who receive nursing care and around £23,140 a year for those who do not.

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Despite thinking the state will not be able to fund all of their needs, around 84 per cent of people said they were not setting aside any money towards the cost of care that they may need in later life, according to health insurer National Friendly.

The lack of saving is despite the fact that 77 per cent of people think any funding provided by the state will not be sufficient to cover all of the care they may need.

More than three-quarters of people also admitted they were not aware of the options available if an elderly relative needed help with their care, while 84 per cent thought the Government was not making care for the elderly a priority.

Richard Sear, chief executive of National Friendly, said: ‘Clear plans must be put in place to provide for our increasing ageing population as soon as possible to ensure that there will be adequate care provision for people in their old age.

‘Even before the credit crunch it was clear that the state would not have the necessary resources available to meet the burden of long term care.

‘In the current economic climate, it is even more important that the public and private sector work together to provide tangible and sustainable solutions.’

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Article by: Becky Barrow

Thousands of elderly people who live in care homes could be the innocent victims of the Government’s controversial capital gains tax grab.

Around 150,000 Britons live in care homes but still own the home where they used to live before poor health forced them to leave.

Experts warned yesterday they could be penalised by CGT bills because their former family home could be treated as their ‘second home’. This can happen once they have lived in a care home for three years.

CGT is not charged on the sale of anybody’s main residence – but it is levied on second homes. At present, CGT is charged at 18 per cent on all gains made each year over the annual exemption of £10,100.

But it has been proposed that the rate rise to 20 per cent for basic rate taxpayers, 40 per cent for higher rate taxpayers and even 50 per cent for the top taxpayers.

Tony Banks, chairman of Balhousie Care Group, said many residents of care homes meet their bills by selling their family home.

The average bill for a nursing home is £35,100 a year, or £24,500 for a residential home with no nursing care.

Mr Banks said: ‘It would be grotesquely unfair of the Government to impose their proposed changes in CGT upon the 150,000 old folk who already live in care homes.’

Paul Green, from Saga, said: ‘The rise in CGT has been put forward by the Lib Dems as a way of stopping fat cats taking their income as capital. But these are old people who desperately need this money.’

The Institute of Directors said yesterday that the planned tax hike would hit many people ‘who cannot be described as rich’.

It said: ‘People likely to suffer include those who have chosen to invest in shares and in property in order to provide for their retirement.’

Official figures show the majority of people who pay CGT are not making vast profits. The latest figures, for 2007-08, show that just 2,000 people made profits of more £1million.

But 189,000 people – more than three-quarters of the total number of CGT payers – made profits of less than £50,000.

Yesterday the Prime Minister reiterated the case for raising CGT, but insisted the concerns of critics would be ‘addressed’ in the emergency Budget later this month.

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