On 25 November 2015, the Chancellor of the Exchequer, George Osborne, outlined his spending plans for the next five years in the Spending Review. The Government has maintained its intention to reduce spending in order to clear the national debt and have a surplus by 2020. The Statement revealed which areas of Government would receive investment and those where services would be trimmed.
Summarised below are the key announcements which may affect those who have reached state retirement age as well as the key proposals in relation to health and social care.
- Basic State Pension will rise to £119.30 per week, an increase of £3.35. Pensioners will now be £1,125 better off per year than in 2010.
- New single tier state pension will be £155.65 for those reaching pension age from April 2016.
- Housing Benefit and Pension Credits to be scrapped for ex-pats (broadly, people living outside the United Kingdom for more than 4 weeks at a time).
- The Government has pledged funding to build 8,000 specialist homes for older and disabled people, with the intention of reducing the number of people requirement care home accommodation.
- The Government will legislate to allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of the person's estate and will set out further plans for introducing this measure in 2016, following technical consultation with ISA providers.
- The Government will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.
- From April 2019, Capital Gains Tax on residential properties will need to be paid within 30 days of disposal of assets.
Health and social care
- The NHS will make £22bn of efficiency savings by 2021.
- There will be a 25% cut in Department of Health budget.
- There will be £6 billion of funding to allocated upfront next year to NHS England (not the Department of Health).
- There will be a £10 billion real term increase by 2020/21 with the aim of delivering 7 day hospital and GP services.
- £150 million will be allocated to fund a new Dementia Research Institute.
- Local Authorities delivering social care will be able to add a 2% social care precept to council tax that must be exclusively spent on social care. This will equate to £2bn of extra funding to the care system by 2019-20 if all Local Authorities take up this offer.
- Social care spending will have risen in real terms by the end of this Parliament.
- There will be an additional £1.5 billion available through an ‘improved’ Better Care Fund in 2017.
- There will be £500 million allocated for the Disabled Facilities Grant up to 2019/20, expected to prevent 8,500 people needing care home accommodation.