At long last a realistic means of paying for social care is appearing to gain some traction. A recent report from the Health Secretary Matt Hancock confirms that he has endorsed proposals for every adult in England to pay into a second ‘pension’ that will be used for funding their old age care.
Mr Hancock said he wants people take more ‘personal responsibility’ for their health and care by regularly saving from their salary.
He said people could be automatically enrolled – in a system similar to workplace pensions – but those who did not wish to contribute would be able to opt out, but Mr Hancock doubts many would choose to do so.
Those who opt-out would have to fund their own social care. He said: “I’m attracted to the model of auto-enrolment, which has been so successful in pensions.
“If you make it the norm, tell people what it is they have to do to look after themselves, it’s often the case that very few people will opt out.”
The idea is the first from a major policy paper on overhauling social care that is due to be finally published within weeks. The so-called ‘green paper’ will include a range of options for consultation and may not make a specific recommendation.
The intervention comes as new figures reveal the number of pensioners who will be looked after is to rise from 657,000 in 2015 to 1.2 million by 2040 and the bill by 159 per cent, from £7.2 billion to £18.7 billion.
Mr Hancock claimed he wants to end the situation where people can lose almost all their money paying for social care.
‘It takes away the injustice of people losing all that they have saved for.’
Those who opt out would still face care bills in the future meaning they would face the same choices over selling their home, as today.
Previous proposals for an overhaul of care funding as part of Theresa May’s ill-fated 2017 general election manifesto – which proposed taking money retrospectively from people’s assets to fund home care – was nicknamed a ‘dementia tax’.
Since auto-enrolment was introduced for workplace pensions in 2012, the number of workers with a pension has almost doubled to 93 per cent.
Under the current Care England system, those in residential care can end up losing all their savings except for the final £23,500, at which point the state steps in.
This includes any property you may own.
While the average cost of care is £25,000 per year, one in ten people can end up paying more than £100,000.
Full details of the proposed social care funding scheme have not been drawn up, but ministers claim it could mean the end to crippling care costs.
This new social initiative is not without its problems however. Should this scheme be implemented it would have an impact on people in their 50s, who would have to contribute more than people in their 20s. Nor does the proposal address the care needs of those who are past retirement.
Former pensions minister Baroness Altmann said “This could be part of a long-term solution for younger generations. Older people who are now retired will need social care soonest, so there is no silver bullet.
Payment for social care has posed a challenge to all political parties over many years because it is recognized as a high octane political issue. Mr Hancocks plan should be considered on merit as there does not appear to be any other proposals on the table. The proposal to pay into a second pension may well be of benefit to younger people, but for those who are retired it says little about how their care needs are to be met.
The Government is expected to publish a Green Paper, a preliminary report, on social care shortly. This should show whether Mr Hancock’s plan is being further developed.
Albert Cook BA, MA & Fellow Charted Quality Institute Managing Director Bettal Quality Consultancy