Why 70,000 People Lost Their Homes to Care Fees in 2023

In 2023, a staggering 70,000 individuals in England and Wales lost their homes to pay for care fees, a distressing reality driven by two critical laws: the Statute of Limitations and Deliberate Deprivation. Many are unaware that elderly care, including dementia support, is not covered by the NHS. This lack of awareness leads to insufficient planning for these potentially crippling expenses.

Consider the case of Mr. and Mrs. Jones, who have spent their lives working hard and are now enjoying retirement at the age of 70. Their plans take a turn when Mrs. Jones begins to exhibit early signs of dementia. Concerned for her health, they visit the doctor for a diagnosis. The doctor conducts a care assessment, which, regardless of the outcome, flags them as being aware of potential future care needs. This moment is pivotal; any attempts to protect their assets post-assessment could be classified as Deliberate Deprivation of Assets.

Following a diagnosis, the couple faces the harsh reality of care costs. They begin researching local care homes, only to be shocked by the staggering price tag of £5,200 per month. With only £8,000 in savings and living on pensions, the couple wonders how they will cover these costs. The care home staff inform them that anyone with an estate valued over £23,250 must self-fund their care. Since they own their home, the local council can seize it, deducting care costs until only £23,250 remains in their estate. Although Mr. Jones can continue living in the home, it cannot be sold or inherited until the debts are settled.

In a moment of desperation, they consider transferring the property to their children. However, this plan encounters a major hurdle: the Statute of Limitations. Under this law, if Mrs. Jones requires care within the next seven years, the government can reclaim the property from the children to cover care fees. Additionally, gifting property can lead to sideways disinheritance and tax implications that complicate matters further.

Seeking professional guidance, Mr. and Mrs. Jones consult an estate planner, who delivers sobering news: due to the care assessment, they can no longer legally protect their estate from care fees without facing charges of Deliberate Deprivation. This law is intended to prevent individuals from concealing assets to evade government fees and taxes, effectively leaving Mr. and Mrs. Jones in a vulnerable position.

This situation exemplifies why many are caught off guard. Non-homeowners with savings below £23,250 receive care for free

This situation is a wake-up call for many. Most do not consider estate protection until faced with the need for care—often when it is already too late. Historically, the majority of people did not own property. It wasn’t until Margaret Thatcher introduced the Right to Buy scheme in 1980 that home-ownership became attainable for many. Those who grew up in wealthier, educated families often understand estate planning because of their background, while the rest remain largely uninformed. It’s rare to hear of politicians losing their homes to care fees; they typically possess the knowledge and resources to safeguard their assets.

To prevent a fate similar to that of Mr. and Mrs. Jones, it is essential to raise awareness about estate protection long before the need for care arises. Understanding the laws and taking proactive steps can help secure one’s home and ensure peace of mind for the future.

Don’t wait until it’s too late. Speak to an estate planner for free using the link below