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Category — Paying for Care

Who cares – zero hours contracts for careworkers while care crisis worsens

Zero hours contracts for private sector careworkers are not conducive to delivering quality care

Trying to fund care on the cheap compromises quality

Treating care staff decently will require funding reform as care crisis grows

As the party conferences shine a spotlight on the problem of zero hours contracts, this seems an opportune time to highlight the working conditions of Britain’s private sector careworkers.

Zero hours contracts are standard in this industry.  The staff are also usually expected to fund the time and costs of travelling from one home to another.  Often earning around the minimum wage, yet carrying out stressful, intimate and vital work for increasing numbers of frail citizens – this is a real indictment of our care system.  As more and more people will need care in our aging population, this needs to be addressed urgently.

The problem stems from our failure to fund social care.  It has always been treated as the ‘poor relation’ in the health industry.  Yet poor social care can be just as life-threatening as poor medical care.  In the past, care has been left to councils or families, but cash-strapped councils cannot cope with increasing demands and families are unaware and unprepared for the costs they will face.  Nobody is saving to fund social care in later life, because they do not realise they need to and there are no incentives on offer to help them plan.  Pensions will not cover social care needs.

It is vital, however, that when funds are found, the quality of care must be adequate.  Ensuring decent working conditions for those providing care is long overdue.  This includes funding better training for careworkers but must also encompass adequate pay and improved working conditions.

None of us wants to become dependent on others when older, but some of us will.  Whether it is for ourselves, or our loved ones, we surely want to know that care will be provided by people who are treated well and feel valued.

Can someone on zero hours contract and minimum wage feel truly valued? Yes, some people do like the flexibility of a zero hours contract, but most careworkers would far rather know they can rely on a minimum level of income each week.  That will require a new mindset in the industry.

Now is a tremendous time to reform standards of employment in this country’s social care system.  The numbers of careworkers required in future will soar, which can provide part of the answer to rising unemployment, but working conditions must improve.  More of us will have to pay others to look after loved ones or ourselves and want to know that the care is of a good quality.  Can that really be achieved when those workers are not given decent working conditions?  This is an issue of immense national and social importance.  What’s your view?


September 16, 2013   1 Comment

Care crisis demands urgent action – savings incentives would help families prepare

Yet another report highlighting the scale of the social care crisis.  The research by NFU Mutual shows that older generations are increasingly facing crippling care costs in later life that they have not prepared for.  Families are finding that their lifetime savings are at risk if they become ill in the wrong way.  Those who have cancer or other illnesses that qualify for NHS treatment will have all their care covered by taxpayers.  Those unlucky enough to develop dementia or other illnesses will not qualify.  Their needs are assessed by local authorities and cash-strapped councils are cutting care provision.  The social care means test is the meanest of all, with any assets worth over £23,250 including the value of the family home, disqualifying people from any council funded care and even for those of more modest means, care is increasingly being restricted only to those with more severe needs.


Families are being failed by the current system.  It is true that the Government has belatedly woken up to the crisis, but the measures introduced so far do not rise to the scale of the immediate challenges.  The long-awaited Dilnot ‘cap’ is too high but also only provides a longer-term framework, rather than a real here and now solution.


The £72,000 cap only covers care costs at council rates (the most basic), only applies to those who already have ‘substantial’ care needs, does not include the costs of board and lodging in a care home and does not even begin until 2016.  Therefore, all care spending before that, or outside those qualification criteria, will not count towards the new cap.


It is true that the Government will also introduce a scheme to pay people’s care fees and the taxpayer will take a charge on the house, so it only needs to be sold when the person dies, rather than while they are still alive.  But of course that still means the value of the family home will have to go to funding care needs, rather than family inheritance.


This is not necessarily unreasonable if people are warned that this could happen and given a chance to save separately for their care needs if they want to do so.  A savings plan which covers family care costs, separately from property value, might appeal to some people, if they knew they needed to prepare.  There is a huge information exercise urgently required to help people understand what responsibilities they will have to shoulder.


The ideal would be a savings incentive scheme to encourage social care provision for families.  Perhaps a separate annual ISA allowance, that could only be spent tax free if the money was used to pay for social care – either for oneself or someone else.  The Chancellor should consider this in his next Budget.


We have a pensions crisis, as millions of people are not saving enough for a pension, however the social care crisis is far worse.  There are billions of pounds set aside for pensions, there is almost no money saved up for social care.  And yet, when it comes to the point of need, the money has to be found.  Unlike pensions, where it is possible to wait a bit longer or work a little more and live on a state pension for a time, once someone needs social care they cannot wait.  The money has to be found.  And social care costs huge sums which a pension cannot cover.


The sooner we wake up to the need to prepare in advance for care, the fewer families will face the difficult task of finding out


September 4, 2013   1 Comment

Pensions are not the best way to save for care


  • Pensions are not the best way to save for care –  we all hope to need a pension but only one in four will need care
  • Most wont reach the cap and will pay for all their care – that may be socially necessary but we need to prepare for it
  • Cap won’t cover all the costs and deferred payment plans should be provided for home care too, to avoid expensive equity release

As the Government unveils its consultation on the Dilnot reforms, here are my thoughts:

1.  Pensions are not the best financial product for covering care costs: As regards financial products, most people do not have enough saved up for a good early retirement income, let alone having money left over for care.  The very well-off will be able to manage but for most middle income groups, pensions cannot cope with care costs.  In any event, most people will not actually need care.  Only one in three or one in four of us are expected to have later life care needs, so it could be a a waste of money for each person to save individually for something most of them will never need.

2.  £72,000 care cap is too high, most will have to cover all their care costs:  It’s important that people realise the newly announced cap on social care costs, while welcome, is set so high that most people will still end up paying for all their care.  The £72,000 is only for basic level, local authority rate care not a higher standard and it will not include the cost of board and lodging which is likely to be an extra £12,000 a year on top of any care costs.  Therefore, most people will spend over £100,000 before getting any state help and will most likely pay for all their social care themselves.  That may be socially necessary, but it is important to be honest about the true scale of the responsibility that will fall on families or individuals.  It is, however, a positive step forward that the means-test threshold is being raised from the current £23,250 to a more reasonable £118,000 including the value of the house.

3.  Insurance likely to be expensive as most will not reach the cap:  The cost of providing care insurance is likely to be very expensive and past products have all failed.  However, saving collectively for care makes more sense.  Not everyone will need to spend money on care at all, but families will want to have a savings pot saved up just in case one of them needs care at some time.  This could help them cover care costs even before they reach ‘substantial’ need too.

4.  Government should introduce special tax incentives to save for care – such as Care ISAs:  I would urge the Government to introduce new incentives to help people save up for care either for themselves or a loved  one in a tax free or ISA format.

5.  The care cap clock only starts ticking when care needs are ‘substantial’:    Only those with substantial needs will start accruing credit towards the cap, therefore those who have more moderate care needs either in their own home or a residential home, will have to pay all the costs themselves.  It is good to have national standards and end the current postcode lottery, but it is also important not to set the bar too high.  Having an assessment will also be useful to help signpost families to sources of information and advice which can be vital in preventing more severe needs, or planning for the future costs.

6.  Government’s proposals will do nothing for the care crisis that already exists:  The reforms will not start before 2015/16, so there is nothing for families facing care costs in the next few years.  The risk of more people having to sell their homes remains.

7. New deferred payment plans should be much better value than equity release, although councils currently provide loans without interest and fees:  It makes sense for the Government to try to reduce the costs of borrowing against one’s home, since equity release is usually a very expensive option.  Currently, around 40,000 people a year sell their home to cover care costs.  They usually are not aware that all local authorities are already obliged to offer deferred payment plans to anyone who asks for one, with no interest or charges.  Of course, most authorities fight hard to avoid having to pay for these and it is not clear why taxpayers should have to subsidise interest free loans.  The proposals for a ‘not-for-profit’ system are sensible, but it is important to recognise that the home will still need to be sold, just not while the person is alive.

8.  Will deferred payment plans also help those needing care at home and with moderate needs?:  The deferred payment plans are only being made available to people in residential care. However those who need looking after in their own home still need to find the money and might therefore also need access to funding for care.  In addition, people with less severe needs will still need help to cover the cost of home-care and, rather than having to sell their home or take out expensive equity release plans, the Government should consider extending the deferred payment plans to others too.

The bottom line:  The bottom line of these proposals is that it will be necessary for families to put money aside for care.  We do not know which one of us will need care in future, but we do know that many of us will have to spend huge sums before the state covers the costs.

July 19, 2013   1 Comment