“Tragedy” as Labour axe cap on social care costs in £1 billion blow to elderly | Personal Finance | Finance
A decision by the Chancellor to axe plans for a cap on social care costs has been condemned as a “tragedy” and “devastating”.
Rachel Reeves announced the cancellation of cap on Monday, alongside a swathe of other spending cuts, in a bid to save £1.1 billion.
The net effect is that this cost will now be carried by elderly people who need nursing care and their families.
Sir Andrew Dilnot, whose government-backed commission proposed a cap on social care costs, described the changes as “a tragedy”.
His commission’s findings were presented to the government more than a decade ago, with proposals including a £35,000 cap on lifetime individual liability for care costs, liability for food and accommodation costs limited to £10,000 per year and the assets threshold for cut-off of state support being raised from £23,250 to £100,000.
The plan to cap social care costs was delayed by former chancellor Jeremy Hunt until October 2025.
During the election campaign, Labour indicated it would implement the reforms despite the proposals not appearing in the party’s manifesto.
However, the Chancellor claimed the cap is no longer affordable because the government had effectively hidden a £22 billion black hole in the nation’s finances.
Speaking to BBC Radio 4’s Today Programme about the cancellation of social care reforms, Sir Andrew said: “I think it’s a tragedy, and it’s very disappointing given what was said in the election campaign on your own programme.
“Wes Streeting, the now shadow secretary of state for social care, said we don’t have any plans to change that situation. That’s the stability and certainty they want to give.
“Later on, on another BBC programme, he said one of the things that we’ve committed to is this. I want to give the sector the certainty this side of the election.
“So to rip this up is unbelievably disappointing for hundreds of thousands of families who need care, for those who are providing it, for those who are trying to make decisions about.”
He added: “It’s another example of social care, something that affects people at some of the most difficult times of their lives, being given too little attention, being ignored, and being tossed aside and its very, very disappointing.
“We seem again to be in a position where a government is saying this isn’t an important enough thing to carry on with.”
He added: “The cost of acting is not great and the transformation to the lives of those who need care and those providing it would be transformative. And I really hope that after this blip we get back to a serious plan.”
Natasha Etherton, SOLLA-accredited Later Life Financial Adviser at wealth manager Evelyn Partners, said the decision by the government “will be a devastating blow to those both served by and operating in the social care sector.”
She said: “The reforms first proposed in 2021 and due to be enacted in October 2025 were never going to solve the care crisis but it would have been a step in the right direction.
“The financial support was always going to be more limited than people realised, so the need to plan for the cost of care would always have remained. But now the rapid and possible total depletion of the assets of those with care needs is back on the cards, and that needs to be on the agenda for anyone in middle age saving for their retirement.”
She added: “Based on the shelved proposals, the cap for social care would have been £86,000, but this would only have covered social care and not the cost of your bed and board, for instance – known as hotel costs.
“Based on figures provided by Just and Laing & Buisson it’s estimated the average person would in fact have paid around £238,700 for their care before reaching the cap – so the need to plan for self-funding your care was always going to be there.
“The big fear for many is having to sell the family home but there might be options to avoid having to do this.”
