Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • June 2018
06

MPs back social care tax for over-40s

Open-access content Wednesday 27th June 2018

Adults aged 40 and over should pay a new tax to help fund the “unsustainable” costs of social care in the UK, two House of Commons select committees have said today.

2


A report from the cross-party MPs argues that the current system is "not fit to respond to future demographic trends", highlighting an urgent need to plug a £2.5bn funding gap.

A 'social care premium' would see individuals either pay additional national insurance, or have their money directly paid into a dedicated not-for-profit fund for adult care.

Contributions would start at the age of 40 to ensure intergenerational fairness, with wider reforms introduced at a later date to guarantee care is free at the point of delivery for all.

"The social care system is in a critical condition and there is an urgent need for more funding," Housing, Communities and local Government committee chair, Clive Betts, said.

"The government should now take the opportunity to build a political and public consensus for a social care premium to secure a fair and sustainable system in the long-term."

Under the proposals, individuals and employers would pay a new contribution into an "independent, dedicated and audited" fund to help gain public trust and acceptance for the measure.

The MPs said the personal element of care, such as help with washing, must eventually be delivered for free, but that accommodation should continue to be paid on a means-tested basis.

They also recommend that an independent body be tasked with providing the government with two-yearly forecasts on the funding requirements for future social care.

The Institute and Faculty of Actuaries (IFoA) responded by highlighting how those with assets between £20,000 and £40,000 lose 80p in means-tested benefits for every pound saved under the current system.

This is thought to disincentivising saving, with IFoA president-elect, Jules Constantinou, explaining how a "complex funding system" also makes it difficult for people to know how much to save.

"Today's report highlights the unfair impact that the current means test has on those with fewer assets," he continued. "Funding reform needs to be sustainable and communicated in a way the public can understand.

"We are pleased to see the recommendation to establish an independent body tasked with modelling and future forecasts.

"Actuaries are experts in this type of long-term analysis and well placed to be involved with this initiative."


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our June 2018 issue of The Actuary.
Click here to view this issue
Filed in:
06

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Part Qualified Pensions Actuary

Manchester
Up to £45,000
Reference
121150

Aggregation Analyst - London Market

London, England
£40000 - £50000 per annum + + Bonus
Reference
121149

Senior Capital Modelling Analyst

London (Central)
Up to £65000 per annum + package
Reference
121148
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2021 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200