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Elderly gain coucil loan scheme

Elderly people are the target of the latest vote-winning scheme to come out of the labour pre-election policy drive. A new scheme will enable elderly homeowners to benefit from an interest-free loan in order to pay for residential or nursing home care.

The scheme is aimed at those elderly homeowners who have assets of more than £16,000. Those with assets below this level will not benefit, since local councils already meet the cost of their care. Loans will be interest-free during the lifetime of the borrower, with interest being charged to their estate only after their death. Councils will not be able to foreclose the loans once the money has been borrowed.

The move is part of the Health and Social Care Bill, which is set to cost £85 million over 3 years. It is aimed at reducing the trauma of a difficult period for many elderly people, when they are faced with the upheaval of moving into residential or nursing care homes. Being forced to sell their home - often the only asset they have - is widely seen to add to the stress and strain of the move, and removing the need to sell should help make the transition a little smoother.