The cost of living continues to rise, and the Spring Budget is focused heavily on the cost of care in the UK. From April this year, the top domestic priority of health and social care has a new dedicated and sustainable source of revenue. Each and every penny collected from the Levy will go directly to the NHS and social care, helping to fund and support the system. But, until this comes into play, families who are caring for elderly relatives continue to feel the pressure, as the cost of living rises. Let’s take a closer look at the Spring Budget, the cost of living and the cost of care in the UK.

The Cost Of Living Continues To Rise

According to the Spring Statement 2022, the unprovoked, premeditated attack Vladimir Putin launched on Ukraine, has created significant uncertainty in regards to the global economy. And despite sanctions and a strong response by the UK, the war is having an adverse effect on the UK economy. Meaning a hike in household and energy bills.

In fact, the UK's rate of inflation has risen to 6.2% in the past 12 months, up from 5.5% in January, according to the Office for National Statistics. And despite government response such as increasing the National Living Wage, the growing pressure of families to make ends meet continues, with many forced to choose between essentials such as food and heating their homes. Now factor in the cost of care and you can see how difficult it can be to care for elderly parents.

For those concerned about the cost of living, there is good news in relation to fuel. A 12-month reduction of 5p per litre on fuel duty will come into force, helping those traveling to and from work, picking up children and visiting relatives to save money.

And according to the Spring Budget, local authorities are set to also increase funding for social care by increasing council tax, and putting in place a cap of £86,000 on the amount anyone in England will need to spend on personal care over their lifetime. This will come into force in October 2023, but will not cover the daily living costs for people in care homes and people will remain responsible for their daily living costs when in care.

The cost of care will depend on where you live in the country. For example, if you live in England and Northern Ireland, with assets of £23,250 or more, you’ll be financially responsible for the full cost of care. This is often referred to as being a self-funder. In Scotland this only applies if you have £28,750 in assets and in Wales, it’s £50,000. Should you need extra support, you can access it, as long as you don’t have assets that meet or exceed these figures.

Pressure On Local Communities

While this cap is beneficial, asking local councils to increase tax has its flaws. To fund social care through tax will inevitably widen regional inequalities. The Local Government Finance Settlement for 2021/22 included an additional £2.2 billion (4.5%) in core funding for Local Authorities, far short of what was needed. £1.9 billion of this is assumed to come from increases in council tax bills of up to 5%. Councils located in more deprived areas are less able to increase council tax, meaning the communities with the greatest needs are the least able to fund their services.

Financial Support For The NHS

For the NHS, the Spring Budget has announced that the government will double the NHS efficiency target from 1.1% to 2.2%, freeing up a massive £4.75 billion to fund NHS priority areas over the next three years. This will ensure that extra funding raised by the Health and Social Care Levy goes towards a worthwhile cause.

With more money in the pot, accessing healthcare services should be easier and receiving care might even be quicker. The NHS will also have more opportunities to invest in a higher quality of care as well as upgrading medical equipment and supporting healthcare providers.