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May`s Dementia Tax

On 19 May 2017 at 5:47pm City Voice wrote:

The Conservatives will attempt to soften the blow by promising that pensioners will not have to sell their homes to pay for their care costs while they or a surviving partner are alive. Instead, 'products will be available' allowing the elderly to pay by extracting equity from their homes, which will be recovered at a later date when they die or sell their residence.
I have just seen this post online:
'People need to read the small print associated with this because its a lot nastier than it looks.
I work in the City. The insurance industry was approached by the Government several months ago with the aim of creating a new market for a new product.
This arrangement is a culmination of those discussions. You wont have to sell your house PROVIDED that you purchase an insurance product to cover your social care. The "premiums" would be recovered from the equity after the house has been sold and the Insurance company will have a lien on the house and can force a sale if it wants to. So your offspring cant keep it on the market for long in order to get the best price.
The real kicker in this is that in order to encourage the industry to market these products the government guaranteed that there would be no cap on the premiums.
This was in some ways "atonement" for Osborne's destruction of the highly lucrative annuities market. This means that the premiums could be up to (and including) the entire remaining equity in the property after the government has taken its cut. Companies will be falling over themselves to get their snouts in this trough.
In short your offspring and relatives could get absolutely nothing from your estate.
If you buy one of these products you need to read the small print very very carefully indeed because there will be some real dogs on the market.
I suspect that this is another financial scandal waiting to happen, but by the time it does May will be long gone." The bits the Tories don't tell you.

On 19 May 2017 at 8:34pm Fairmeadow wrote:

Nice conspiracy theory, but why should anyone buy such a "product"?

On 19 May 2017 at 8:50pm Buzzard wrote:

Same reason people bought PPI, or voted for Brexit - mis-selling. At least with PPI, you can get your money back. The point here is that you will HAVE to buy "insurance" to pay for care, and if the companies combine to keep premiums up, your children will be robbed of their inheritance. Care has to be paid for somehow, of course, and it could have been done by raising Inheritance Tax especially for the very rich, and blocking some of the loopholes they use. But that would not be the Tory way.