Chris Knight, CEO, Legal & General Retirement Retail, comments: “Our country is facing a crisis in care funding. The Kings Fund recently predicted that care will face a £2.5bn gap by 2020, so it is right that Members of Parliament are reviewing ways to increase funding support for social care services, so that more people can get the support they often need in later life.
“However, we believe that property wealth has a potentially significant role to play in addressing the care crisis too. The predicted £2.5bn funding gap is a drop in the ocean compared to the £1 trillion of housing equity that Britain’s ‘Last Time Buyers’ could access to help pay for their care needs at home.[1] The lifetime mortgage market is already well placed to help cover the costs of social care, providing these individuals with the capability to remain in their homes, but also pay for the care they need to maintain their independence for longer and with dignity.”
Steven Cameron, Pensions Director at Aegon comments: “As life expectancies continue to rise, finding a solution to the long term funding of adult social care is one of our country’s greatest challenges. There’s growing acceptance we need a clear and fair deal setting out what the state will pay and what individuals will be expected to pay, based on their financial position. This needs to be stable and free of political tinkering, so these cross-party recommendations are welcome as the Government prepares to reveal its proposals in the Autumn.
“The deal needs to be fair but also widely accepted as fair by the voting population. This means the funding of the state’s share needs to consider how to strike the right balance between older and younger generations and between individuals and employers. There’s a growing interest in looking to raise tax on wealth as well as income to provide funding.
“While individuals increasingly accept they will need to pay a share, it’s absolutely vital we avoid the ‘lottery of incurring catastrophic care costs’ the report flags by setting an overall cap on how much any individual will be expected to pay personally for their care. This is also needed to allow people to fund in advance while protecting inheritance aspirations.”
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