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More than half of Brits ‘very negative’ over social care funding plans

Tom Selby, senior analyst at AJ Bell
Tom Selby, head of retirement policy, AJ Bell
  • The Government’s social care funding reforms face a mounting backlash from voters, new research suggests
  • Almost 4 in 5 (79%) of Brits view the reforms, which will see lifetime costs capped at £86,000 and the means-testing threshold rise to £100,000, as either quite negative or very negative
  • More than half (57%) of Brits are ‘very negative’ about the plans, saying they will ‘never’ be able to afford £86,000 of care costs
  • Only 5% of respondents were ‘very positive’ about the changes, while around 1 in 6 (16%) were ‘quite positive’
  • Survey also sought views on alternative reforms to encourage people to save for social care:
    • More than 4-in-5 (21%) agreed automatic enrolment into an insurance product would most encourage them to save for care, followed by a Care ISA with a 25% upfront bonus (16%) and tax-free pension access (15%)
    • However, the majority (57%) said none of these reforms would encourage them to save for care

Tom Selby, head of retirement policy at AJ Bell (pictured), comments:

“After a decade of broken promises on social care funding, Prime Minister Boris Johnson at least deserves credit for putting forward concrete plans to address the social care crisis.

“Currently people can face unlimited social care costs. Under reforms outlined by the Government last year, from 2023, lifetime personal care costs will be capped at £86,000 and the means-testing threshold raised to £100,000.

“The reforms will be funded through a controversial 1.25 percentage point increase in National Insurance rates for both employers and employees – although this cash is also being used to bolster the NHS.

“However, the relatively high level of the cost cap appears to be putting people off, with the vast majority saying they view the plans negatively. In fact, more than half of Brits say they are ‘very negative’ about the reforms and worry they will ‘never’ be able to afford costs up to the £86,000 cap.

“This comes as the Prime Minister faces growing concern over the timing of the planned National Insurance rise, with some Cabinet ministers reportedly voicing disquiet over the impact it could have at a time inflation is soaring and energy bills are set to skyrocket.

“This combined with negative voter sentiment will inevitably lead some to push for the changes to be delayed or shelved altogether.”

Demand-side reforms receive some support

“Although the £86,000 cap should help prevent catastrophic care costs, for the reforms to really work people need to save more to cover the risk or be willing to sell down their existing assets.

“There are various reform options that have been suggested to boost saving for long-term care. Automatic enrolment into a care insurance product appears to be the most likely to encourage greater levels of saving (21%), followed by a Care ISA with an upfront bonus (16%) and increased tax-free pensions access (15%).

“However, perhaps tellingly, more than half of respondents (57%) said none of these interventions would encourage them to set aside cash to pay for long-term care in the future.”

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