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Social care reforms proposed for third of UK population

Around a third of the UK population could benefit from targeted government incentives that boost saving for social care, the Pension Policy Institute (PPI) has proposed.

25 JUNE 2019 | CHRIS SEEKINGS
New campaign needed to raise social care awareness ©Shutterstock
New campaign needed to raise social care awareness ©Shutterstock


In a report published today, the PPI said there is a “clearly identifiable” group of people unable to claim support from the state that do not have enough finances to fund their care.

Providing tax exemptions and individual saving accounts (ISAs) for social care are among five proposals outlined in the report that could increase the funds available.

These would be targeted at people with savings between £23,350 and £200,000, excluding their house value. Around 37% of the over-50s in England currently meet the criteria.

PPI senior policy analyst, John Adams, said: “The diversity in people’s assets means that a single solution to this complex issue is unlikely to work for all.

“In developing a care funding framework, a wide range of options might need to be available, with the aim of enabling people to find the best solution for themselves."

The five proposals include no income tax being paid on pension income used for care, a new Care ISA, tax-free pension withdraws for care insurance, housing equity for care insurance, and pledging equity from a property for care.

Meanwhile, the Association of British Insurers (ABI), which sponsored the report, said that most adults are unprepared for a potential “social care financial time bomb”.

It found that 89% of people aged over 65 in the UK have made no plans to pay for social care, despite around half of all care users having to fund themselves in some way.

Around 50% of people see the state pension as the most likely source of care funding, with only 17% citing insurance, and 26% saying they would sell their home.

The ABI said that a “massive new campaign” is needed to raise awareness of social care funding, and that incentives should be considered to boost saving.

Director of policy, long-term savings and protection, Yvonne Braun, said: “The social care system and how it is funded desperately needs an overhaul.

“While insurance and pension savings will never be the whole answer to the social care funding question, it can play an important role.”


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