The government then offers some means-tested support.
It is only once assets fall to the lower capital limit of £14,250 that individuals are no longer asked to contribute from assets.
The Conservatives’ deal was to have increased these levels significantly to £100,000 and £20,000 respectively, meaning many more individuals would have started receiving some government support sooner, albeit still often contributing significant sums.
For those receiving residential care, and not staying in their house, the house value is included within assets.
Selling the family home to pay for care is particularly emotive and can be delayed by using a deferred payment agreement where eligible.
The consequences of cancelling the deal
Regrettably, scrapping the deal leaves us exactly where we have been for some years.
Those requiring care for lengthy periods – particularly where advice is not taken, ideally at an earlier age – can see lifetime savings wiped out, destroying hopes of passing something on to younger generations.
To me, and pretty much anyone I have ever spoken to on the topic, that just does not seem fair.
But it also would not be fair to expect the state to pick up all costs for individuals, however wealthy.
This is why I had hoped Labour would agree with the principle that a fairer sharing of costs between the state and individuals, based on ability to pay, was the sustainable way forward, encouraging people to plan ahead.
Advice opportunities
Under the current regime, it is difficult to help clients plan ahead fully for possible future care costs.
One option currently available is to buy a ‘care annuity’ at the point when an individual needs care.
A deal with a cap would have opened up a new range of advice opportunities to help individuals plan ahead.
For many, this could become an important consideration as they approach and move through retirement.
Indeed, in the era of consumer duty an adviser who is not helping a client with this eventuality could be considered as not acting to avoid foreseeable harm.
Some have suggested insurance solutions might be developed to cover eligible personal contributions.
Even with a cap, costs of such insurance would likely have been unattractively high, with a significant proportion likely to claim.
But without any cap, this becomes even less viable.
Some individuals will have sufficient wealth and income to cover care costs however high and for however long.
For them, advisers can help with tax, trust and estate planning. They might also factor a care home eventuality into investment decisions.
But what of those not in such a fortunate position who still want to have peace of mind that they are making appropriate provision?
