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Majority of parents gift cash without considering future care costs

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  • 06/07/2021
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Majority of parents gift cash without considering future care costs
Parents are failing to consider how they will pay for their own care costs when gifting money to children as confusion over the level of government support gives families a false sense of security.

Almost 70 per cent of parents who have given their children a cash gift had not considered how they would pay for their own care when deciding how much cash to hand over. And just four per cent had made helping them with their future care costs a condition of the gift.

Just Group’s care report, The Policy Vacuum, reveals that families do not discuss the knock-on effects of passing on a living inheritance due to confusion over how much financial help the government has agreed to provide.

Stephen Lowe, group communications director at Just Group, said: “Despite people knowing future care costs could run into many thousands of pounds, it’s very rarely part of the discussion when handing over significant sums.”

According to the report, uncertainty around families’ responsibilities to pay for care in the future appears to be discouraging many from factoring it into their financial plans or discussing the care issue with children.

For example, Just found that a third of those surveyed said they thought care costs were capped at £72,000. This was legislation that had been passed but was never implemented.

“This year’s Queen’s Speech highlighting the government’s plans for reforms included a single pithy promise; ‘Proposals on social care reform will be brought forward’,” said Lowe.

“Those nine words encompass the hope of meaningful change, not just for those experiencing the care sector today but the many millions who aspire to receiving a good standard of affordable care should they need it later in life.

“But it isn’t the first time that a promise has been made and over the years there has been far more talk than action. Our research shows that the inability to act has consequences in the minds of the public.”

Just is calling on the government to:

• End the unfairness of self-funders subsidising care costs for others
• Enable people with the greatest care needs to avoid open ended costs through cost caps and/or risk-pooling
• Ensure information and support is provided at the right time and in the most effective way
• Encourage and incentivise better planning and financial advice for later life
• Promote a competitive market that supports innovation and shares best practice

 

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