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Liz exposes hidden interest charges

[28/10/2013 | No comment]

The Government isn’t being straight with elderly people about the extra costs they will have to pay under their new proposals for funding social care.

Interest will be charged on the new universal deferred payment scheme – council loans to help cover care home fees which have to be paid back after a person dies by selling the family home. My Parliamentary questions have revealed for the first time that these interest charges, which work in the same way as interest on a mortgage, will not be included in the Government’s so-called ‘cap’ on care costs of £72,000.

Based on the average annual fee for a residential care home in England, this means care loans to cover the average length of stay – two and a half years – will clock up extra costs of £3,500 in interest alone. Elderly people who live in residential care for 5 years – currently more than one in eight care home residents – face paying £13,800 in interest charges.

I think elderly people and their families deserve to be told the facts about how much they will really have to pay under the Government’s social care plans, so they can properly plan for the future. You can read the coverage of this story in the media here and here, and read my press release on the issue here:

Liz Kendall MP deferred payment schemes press release 26th Oct 2013

 

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