Prestige Nursing Plus Care calls for clarity on the financial impact of pension and care reforms.
Jonathan Bruce, managing director of Prestige Nursing Plus Care, said it is vital that ambitious moves to revolutionise both pensions and care systems do not add to the financial fog that clouds so much decision making in later life.
Allowing greater access to pension savings could cause people to lose their exemption from care costs as a result, Mr Bruce warned.
He said: “We are already grappling with an unhealthy national diet of confusion and apathy about paying for care. Before the first person steps up to withdraw their pension savings next year, there needs to be clarity over how this decision will affect future means testing for care support.”
Under the new Care Act, Mr Bruce said the means-tested threshold for care costs will increase to £118,000 for people with property assets and £27,000 for those without.
Anyone below these limits will be exempt from care costs while those above them will pay at least a portion of their costs.
Mr Bruce said pension and annuity savings do not currently count alongside financial and property assets towards the means test for care.
But from April 2015, Mr Bruce said the government’s ‘pensions revolution’ will give people greater freedom to withdraw their defined contribution pension savings however they wish – therefore boosting their financial assets.
As yet, Mr Bruce warned there is no clarity about whether savings withdrawn in this way will be counted towards means testing for care.
He said: “A clear explanation about the impact of these changes would allow people to plan ahead more efficiently, and also create an environment where new products and solutions to fund long term care can be developed.
“It is crucial the government sets out the implications of the new pension freedoms on care funding to avoid leading thousands of retirees down a financial cul-de-sac.
“It is impossible to exaggerate the importance of advice and guidance when planning for your future, and as the largest looming expense for many people as they grow older, clarity on care funding must be top of the list.”
