For many of us, planning for the future usually means thinking about pensions, savings, and perhaps what we hope to leave to our families. But there is another issue that often gets overlooked-and it can have a far bigger impact on your finances than market swings or tax changes. That issue is long-term care

Across England, thousands of people face unexpected and sometimes enormous care bills each year. It is not because they failed to save or plan. It is because the social care system places most of the financial risk on individuals. And despite more than a decade of warnings and a widely supported reform plan, the 2011 Dilnot Report, successive governments have failed miserably to act

NMTBP explains why long-term care poses such a major threat to your wealth, what the Dilnot Report proposed, and why so many of us are stuck in uncertainty

Why long-term care can cost so much

Long-term care is different from healthcare. The NHS remains free at the point of use, but social care is means-tested, meaning that if you have savings or assets above £23,250, you are expected to pay for your own care

Costs vary, but they often fall into these ranges:

• Home care: £20–£30 per hour
• Residential care: £40,000–£50,000 per year
• Dementia care: often far higher, sometimes exceeding £100,000 in total

These costs can continue for months or even years. And because care needs are unpredictable, most people cannot budget for them in advance

Some will never need formal care. Others may need full-time support for many years. From a financial-planning point of view, it’s a gamble-and the stakes are high

This is why long-term care has become one of the biggest threats to personal and family wealth in later life. Many people find themselves using their pension savings, their investments, and even selling their family home to cover costs

The Dilnot Report: A Missed Opportunity

Back in 2011, the government commissioned a major review of social-care funding chaired by economist Andrew Dilnot. His proposals were widely praised and offered a fairer, clearer system.

Dilnot suggested:

• A cap on the total amount people should pay for their care –he recommended around £35,000
• A more generous means test, so people wouldn’t lose all their assets
• A clear national framework, instead of confusing local differences

The idea was simple: people should contribute to their care, but no one should face unlimited, life-changing bills

A cap would mean families could plan ahead, insurers could design sensible policies, and older adults could protect more of their hard-earned assets

Some of these proposals were written into the Care Act 2014, but they were never implemented. Governments delayed the changes again and again-first due to austerity, then Brexit, then Covid-19, and now because of wider budget pressures

Although a new cap was announced for 2023, it has also been postponed

More than a decade after Dilnot’s work, the core problem remains

What this means for us today

Because reform has not happened, we still face a system that many find:

• Unpredictable – no one knows what their future care costs might be
• Unequal – people with similar needs can pay very different amounts
• Unfair – illnesses like dementia often lead to far higher personal bills
• Stressful for families – especially when decisions must be made quickly
• A threat to inheritance planning – many expect to leave far less than they hoped

The burden falls particularly on middle-income families. They have too much saved to qualify for support, but not enough to pay unlimited care bills without real hardship

In many cases, people do not seek advice until they are already in crisis-for example, when a loved one suddenly needs residential care. By that point, options can be limited

Why governments keep delaying reform

There are several reasons politicians have struggled to fix the problem:

Cost

Social-care reform is expensive in the short term, even if it saves money in the long term. Governments often prioritise more immediate political issues

Complexity

Social care sits awkwardly between the NHS (free) and local authority services (means-tested). Reform requires significant changes across both systems

Low visibility

While the NHS is always a top public concern, social care tends to receive less attention until people experience it directly

Short-termism

Reforming care takes long-term commitment, but governments change frequently, and priorities shift

The result is a decade of promises, delays, and frustration, leaving us to navigate the system largely on our own

What you can do to protect yourself

While we cannot fix national policy ourselves, there are practical steps we can take:

Seek early advice

Talk to an independent financial adviser who specialises in later-life planning or the Society of Later Life Advisers (SOLLA). They can help you understand what support you might qualify for and how to structure your finances

Understand the rules on gifting and ‘deprivation of assets’

Giving away money or property to avoid care fees can cause problems later if a local authority believes the gift was made to avoid paying for care

Explore home adaptations and community care options

Many people can delay or reduce the need for residential care with the proper support at home

Make your wishes clear

Setting up lasting powers of attorney (LPAs), updating your will, and having honest family conversations can make stressful situations easier

Looking ahead: why reform still matters

In January 2025, the Labour government unveiled a ‘groundbreaking initiative’ spearheaded by Baroness Louise Casey to reform the adult social care sector. Unfortunately, it is not due to report until sometime in 2028! Don’t hold your breath!

The current system leaves too many people exposed to life-changing financial risk. Long-term care should not be a lottery in which some lose everything, and others pay nothing.

The Dilnot reforms remain one of the clearest, fairest solutions ever proposed. Implementing them, or a similar cap on care costs, would give us the certainty and dignity we deserve

Until then, understanding the system and planning early is the best protection you have