Pension funds will become a better source of payment for later-life care, thanks to government changes to pensions, Ros Altmann has said.
The government’s older workers’ champion said with the removal of the 55 per cent tax on pensions in the event of death before 75, as well as the freedoms set to come in next April, long-term care would be given a fillip.
She said: “There is now a much more realistic chance that pension funds can help pay for later life care needs, for which no funding has been put in place and which many more people will require.
“There is a looming crisis in the funding of elderly care, with neither the state, nor the private sector having prepared for this adequately.”
Ms Altmann added that the pension reforms could “kick-start care funding” by encouraging people to leave money in their pension funds. “If they need care, they have the money to pay for it. The state will not pay and cannot pay for all”, she added.
Adviser view
Janet Davies, joint founder and managing director of later-life advisory trade body Symponia, said: “The chancellor’s bold reform certainly gives a renewed vigour for pensions and IHT to come together; but it calls for some real joined-up thinking.
“Unless people - George Osborne and advisers included - start to put the potential need for care into the mix, the opportunities for a proper revolution will be lost.”
