Five Questions About: Long-term care fees

What is long-term care?

Services for older individuals who need help with everyday activities. They can be provided in someone's home, in a community centre or in a care home. The costs are met by the individuals themselves or on a means-tested basis by local authorities.

How much does it cost?

A quarter of people aged 65 will need to spend very little on care. Half can expect care costs of up to £20,000, while one in 10 can expect costs of over £100,000, and some much more than this. More than 80,000 elderly people paying for private care at home or in residential homes run out of money each year and have to turn to local authorities.

Who qualifies for help?

If social services in England assess someone with less than £14,250 in assets as needing care, he or she will qualify for local authority funding. Those with savings or assets (including their homes if they live alone) of £14,250 to £23,250 will get some help towards costs. People with assets or savings of more than £23,250 will have to pay the full cost of care. There are plans to increase this threshold to £100,000.

What other changes are being considered?

Another proposal is for a £35,000 cap on individual care contributions.

How can I prepare for care costs in old age?

Only 6 per cent of the working population is saving for old-age care. Options include insurance policies, or equity-release.

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