Elderly in England’s poorest areas to lose three times property wealth to social care costs

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Homeowners in the poorest areas of England face losing a three times greater share of their housing wealth to pay for social care than people in the most affluent areas, Guardian analysis reveals.

Last week ministers decided not to count means-tested council funding of care towards a new £86,000 care cap, forcing people to pay more towards their care. The plan will on average leave homeowners who need long-term elderly care in the most deprived northern areas spending at least 60% of their eligible property value, compared to 20% in the wealthiest southern areas, analysis shows.

It means the controversial policy, which narrowly passed the Commons in a vote by 272 votes to 246, will hit voters far harder in Blackpool, County Durham and Hull, where the average house price is below £120,000, than in Winchester, Guildford and Brentwood where they average over £450,000.

The analysis of the 10% least and most deprived areas in the official index of multiple deprivation uses median property prices and is likely to understate the proportion of wealth paid by the average pensioner.

Jeremy Hunt, the former health secretary, on Monday attacked the policy as “very disappointing” saying that it was “less progressive … than hoped for”. But he stopped short of backing a Conservative backbench rebellion. Tory MPs said there was significant irritation at the way the change had been announced.

“There is an operation under way from No 10 and the Department of Health and Social Care (DHSC) to provide reassurance but it still underlines the fact that yet again we are told one thing and the details turn out to be different,” one said. The government whipped MPs to leave the party’s winter fundraising dinner early on Monday to vote.

Speaking in the Commons, the health minister Edward Argar defended the change which goes against what was originally proposed by the architect of the care cap, Sir Andrew Dilnot. “We’ve always intended that the cap applies to what people personally contribute, rather than on the combination of their personal contribution and that of the state,” he said.

Argar said, to roars of disapproval from the Labour benches, that “no one will lose from these reforms compared to the system we have now, and the overwhelming majority will win.”

No impact assessment of the change has been provided by the government. Former chief whip Mark Harper said he would vote against the plan. “It potentially disadvantages the less well off and those of working age with lifelong conditions,” he said.

Labour described the changes as “daylight robbery”. “If you live in a £1m house, perhaps in the home counties, 90% of your assets will be protected if you need social care, but if you live in a £80,000 terrace house in Hartlepool or Mansfield or Wigan, for example, you lose nearly everything,” said Jon Ashworth, shadow health secretary.

The decision not to count means-tested council funding of care towards the £86,000 care cap risks a backlash from Tory voters in marginal seats – the latest in a series of government moves including the new rail strategy and the handling of the row over MPs second jobs feared to have strained relations with party supporters. Three out of County Durham’s six MPs are Conservatives who beat Labour at the 2019 general election as part of the demolition of the so-called “red wall”.

Downing Street on Monday said the new cap was still far more generous than the current system, which means people across the country face having to sell their homes. But government officials have admitted that changes to the way the care cap will be delivered means up to a quarter of older adults who face residential care in England could end up taking more from their assets than was envisaged when the cap proposals were first put into legislation in 2014.

It means at least 125,000 people at any one time could be facing higher costs than if the original vision for the care cap, devised by the economist Sir Andrew Dilnot, was delivered. Dilnot said on Monday that the proposal will not avoid “catastrophic” costs for many who will still be forced to sell their homes. Hunt lamented the “slightly more stingy cap” but urged Conservative backbenchers not to rebel against the reform, suggesting the formula could be changed by future governments.

Downing Street insisted the reform was “necessary, fair and responsible”. The prime minister’s spokesperson said: “The system benefits those who are worst off. Currently anyone with assets of over £23,350 pays for their care costs. Under the new system anyone with assets under £20,000 will not have to pay anything at all, ensuring those with the least are protected.”

DHSC will only count care bills paid privately rather than subsidised by the taxpayer towards the cap. This means that a poorer person who has a long stay in a care home could still have to pay up to £86,000 out of their own assets even if the council pays part of their bill. They could end up paying the same as a wealthier person.

It will save the government £900m a year by 2027 but Dilnot said: “For those with assets of say less than £100,000, we are not tackling catastrophic costs … for the less well off although we are for the better off.”

He has said that anyone with assets of less than £186,000 will be less well off under the new scheme than was expected under his version of the plan, which was legislated for in 2014 but not put into practice.

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