Wednesday 16 January 2019
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Self funders of care services paying more than ever before says Age UK

Older people who need social care are paying more than ever before, according to Age UK. New analysis suggests that private spending on social care has risen by 4.5% (£380 million) in the last year and is likely to continue to increase each year.

The charity’s analysis shows that in England more and more older people are paying for their own care, supporting its call for a new clear and transparent care and support system that will allow people to plan for the cost of care in later life. At the moment there is no realistic way for people to avoid potentially catastrophic costs – it is estimated that one in ten of those needing care spend over £100,000.

Over the same period of time there has been a fall in public sector spending on older people’s care of £341 million or approximately 4.5%. That is a decrease from £7.65 billion in 2010-11 to an estimated £7.3 billion in 2011-12 (2011 prices).

In 2011/2012 private expenditure on social care, which includes charges for council-funded services, top up payments to supplement local authority payments that do not completely cover residential care home fees, and privately purchased home and residential care was an estimated £8.78 billion(1), in comparison to £8.4 billion spent on private expenditure in 2010/2011.

Age UK estimates that by 2015, an extra £2.2 billion will come out of older people’s pocket to pay for social care services.

Age UK fears that continued increases in care costs could result in a number of older people not being able to afford their current care packages, leading them to either cut back or do without.

This extra spend comes at a time when public expenditure on social care is falling in real terms even though the population is rapidly ageing – the number of people aged 65 years and over is expected to rise by 65% in the next 25 years to over 16.4 million by 2033(2)

Table 1. Shows estimated private expenditure on care (England) - £bn per annum, various years: Source PSSRU and Age UK analysis (2011 prices)(i)



Residential Care

Home based
care costs


2010/11 5.76 2.64 8.40
2015/16 7.30 3.32 10.62
2020/21 9.28 4.37 13.64
2025/26 11.73 5.75 17.48

The projected increases in private expenditure on social care services are based on an ageing population - each year about 650,000 people turn 65(3) - and higher levels of wealth among new generations who are beginning to use care services as they grow older. This means that there will be more people who need to use care services but fewer of them will be eligible for public funding.

A number of other factors are also driving up private expenditure even more. Tightening eligibility criteria of care services has had an impact – which means that people who previously could have been entitled to state help with care costs no longer qualify because the local authority has decided that it will only provide care for those with higher levels of disability.

Four fifths of councils now only provide care to those with either substantial or critical needs and anyone who doesn’t meet the eligibility criteria of their local council has to pay for any care they need.

At the same time, means test thresholds are not keeping pace with inflation. In fact there has been no increase to the threshold levels in the last two years. From April this year, the means test threshold continues to be £23,500 – which means that older people have to use all of their savings above this level before they qualify for state financial support. For some this means selling their house. In comparison to 2005’s means test threshold(4), an older person in residential care today would be £2,200 worse off.

The charges that local authorities make to individuals to use their services have also significantly risen in the last four years. In 2010/11, care charges were £150 per year higher than in 2009/10 for each older person using local authority care services and £360 higher than in 2008/09.

Last summer, the Government welcomed the independent report from the Dilnot Commission, in which one of the recommendations stated that individual lifetime contributions towards care costs should be capped. The report also set out a system that would allow people to appropriately plan to pay their share of care, and avoid the situation where they face catastrophic costs that they could not predict nor protect themselves against. Age UK believes the report provided the Government with a clear blue print for social care reform and urges it to act now to publish a white paper that adopts the Dilnot Commission recommendations to create a fair and sustainable social care system for older people now and in the future.

Michelle Mitchell, Charity Director of Age UK said: 'The financial crisis in social care is extremely worrying. More and more older people are having to take on an ever greater share of the burden of funding social care, either through being pushed out of the system because of tightened eligibility thresholds or because they are forced to pay more in fees and charges. We fear that many others simply decide that they cannot afford care support and struggle on alone.

'The current funding system for care is unfair and unsustainable. Too many Governments have dealt with care funding by sporadically scrabbling behind the Treasury sofa for bits and pieces of funding rather than creating a sensible and thought-out system that will not only look after older people now but future generations of those in later life. Older people’s health and dignity are being put at risk by a system starved of cash.

'The Dilnot Commission produced a clear roadmap for care reform – its now time for the Government to be bold and produce a white paper that guarantees a national entitlement to care, better quality of services and most importantly a fairer way of funding social care services now and in the future.'

Age UK is urging all those who care about the future for older people’s care to back its Care in Crisis campaign, demanding urgent reform of the social care system. The charity has launched a Care in Crisis petition calling on the Government to reform the care system for older and disabled people so that everyone gets the care they need to live with respect and dignity. It aims to collect 100,000 signatures and will deliver them to the Government ahead of the planned White Paper on the future of long term care.