Asset-rich to pay up as govt freezes LTC threshold

The asset threshold over which individuals cannot access state help with long term care (LTC) bills has been frozen at £23,250 until 2013.

The move comes as the Commission on Funding and Support, headed by former Labour health minister Lord Warner, says homeowners must pay for their own LTC using the equity in their homes to create ‘inter-generational fairness'.

Michelle Mitchell, director of Age UK, says freezing the threshold will ‘hit the most vulnerable' and cause ‘considerable distress', but Lord Warner says the older generation has ‘done pretty well' in building up assets and must now use them.

Lord Warner says the idea of universal state provision of LTC is a ‘fantasy' and adds young people should not have to pay for the older generation whilst struggling themselves.

According to figures from LTC annuity provider Partnership, 85% of the wealth in the UK is held by the over-60s.

"The debate surrounding this issue will increase awareness of products available to ensure people can pay for their care for as long as they need to and protect a large part of their estate," says Chris Horlick, managing director of long term care, Partnership (pictured).

"The key point is older people and their families need to be signposted to specialist financial advice at their time of need. It reinforces the opportunity for good advisers in this area.

"Over 50,000 people entering residential care last year were self-funders and only 7,000 of them received appropriate financial advice. The numbers of self-funders is set to increase as eligibility criteria for state support is tightened."