Care cap 'may cost more than home values' - Partnership

The care cap, also known as the Dilnot cap, limits the costs of care to £72,000, however owing to the terms of the cap the amount spent may exceed the cap before it is triggered.

The typical English homeowner would need to spend £177,500 on social care costs over 6.13 before triggering the cap, equivalent to 92% of the typical home's value, £193,426.

If someone spent £28,964 annually on care, only the amount the local authority would agree to pay would be taken into account, minus the "hotel costs" £12,000 annually.

Therefore only £11,764 annually would count towards the cap and receiving state contribution.

The figures vary widely by region, in Yorkshire, where the average home costs £132,812 and the costs until the cap is reached are £195,000, the care cap is worth 147% of the value of people's homes, with 7.7 years until the cap is reached.

In the West Midlands people would have to spend the most before the cap is reached at £211,000, while in London only 40% of home equity would have to be spent before the cap was reached, London also has the lowest cost until the cap is reached at £143,000.

Thomas Kenny, head of technical pricing at Partnership said: "In principle, the care cap is an excellent idea. However, as only the amount that the local council is willing to pay - less the hotel costs - is counted, people are likely to pay significantly more than the £72,000 they anticipate.

"Indeed, someone living in England might expect to pay around £177,451 over more than six years before they are eligible for any state contribution.

"While the government has said that no one will be forced to sell their home, this is the largest asset that many people have and it may well be their only option. To avoid watching the capital that they have built over a lifetime being eroded by costs, they should speak to a specialist independent financial adviser who will be able to recommend the best course of action. "