The Institute and Faculty of Actuaries (IFoA) has welcomed Chancellor George Osborne's Autumn Statement announcement of funding for flood defence schemes, but has warned that measures announced to address social care funding may fall short.
IFoA president Fiona Morrison described the funding for flood defence schemes as a positive step. However, affordable insurance remains an issue, she said.
"There is a low take up of flood insurance by low income groups, with 24% of these households uninsured against flood. Flood defences will go some way to helping protect this group of households from costly damage," said Morrison. "Five of the UK's top six wettest years have occurred since 2000, therefore improvements in flood defences, especially protecting against surface flooding, will be a major factor in maintaining an affordable insurance market for householders who live in such areas."
In the Autumn Statement, the chancellor also announced new powers for local authorities to increase council tax by an additional 2% to fund social care provision. This step aims to help meet some of the funding shortfall many councils have been facing, but does not address regional differences.
Morrison said: "IFoA research found vast regional differences in the cost of social care and this change does not address that. As life expectancy has been steadily increasing over the past decade and healthy life expectancy is not keeping pace, how long a person can expect to live with health or social care needs is continuing to rise and this needs to be addressed."
A male in the UK, aged 65, can expect to live a further 17.8 years, and would likely have care needs for 7.4 years. The life expectancy for females aged 65 is a further 20.4 years and they would likely have care needs for 9.2 years, according to the IFoA research.
The IFoA has recommended a government-led awareness campaign to highlight the potential costs of longer life expectancy and care needs. "This would help people understand the potential care costs they might face so they can begin to take on the responsibility of saving towards these costs," said Morrison.