An organisation representing pensioners has criticised Government plans to offer the elderly facing care home fees a local council loan to avoid having to sell their own house.

Town halls will be ordered to draw up comprehensive “deferred payment” schemes and ensure local people moving into care are aware the option is available, the Government will say today.

They will be allowed – for the first time – to cover running costs by charging interest on the repayments, which will be made from the resident’s estate, after they die.

Local authorities will also be required to arrange financial advice to help older people plan for their future when the flagship Care Bill comes into force in 2015.

Jean Walker, chairman of Bradford’s Older People's Alliance, asked what would happen to pensioners’ homes while they were in care if they were left empty, and how much premiums people would be expected to pay on insurance to pay for their eventual care. She also said academics needed more common sense and to think about the practicalities of measures introduced.

“It used to be you would save up and buy a home, but people now expect to be provided for and do not want to do without in order to buy a home,” she said.

“They (the Government) make it seem so easy, but who’s going to be looking after your home while you are in care? It seems to me to be very hard at the end of life to be expected to pay for everything. Solutions are not black and white, they are shades of grey.”

Hailing the package, Care Minister Norman Lamb said: “No one need face unlimited care costs or the prospect of selling their home in their lifetime.”

The department of health said existing schemes were “patchy”, with some councils rejecting people on grounds of age, or if they had sizeable assets.

But Bradford City Council said it currently had 169 people on its books who had been given loans, of which 55 were deceased. Some date back to 2004.

Anyone going into care is sent a leaflet explaining the option of a deferred payment arrangement, with the offer of a meeting.

There were immediate fears cash-starved councils will struggle to fund the extra help required, despite an extra £335 million promised by the Government. Across England, only 8,500 people were in deferred schemes last year, but they were costing councils a total of £197 million.

Council leaders had asked for £500 million extra, with ministers admitting a “few hundred thousand” extra people across the country will now come forward.

Furthermore, in 2015 local authorities will be attempting to cope with a further ten per cent cut to their grants – losing £2.1 billion across England.

The Association of Directors of Adult Social Services has welcomed extra cash for social care, but warned: “That could be made more difficult while local government begins slowly to disintegrate.”

Mr Lamb said deferred payments would work like a “draw-down mortgage”, with care home fees added on each week, rather than in a lump sum.

A consultation will also explore how to ensure people received help to maintain, rent, or sell their home if that is what they chose to do The deferred payment schemes will be introduced one year ahead of a new £72,000 cap on lifetime care costs.