Just Retirement has launched Care Funding Plan, an immediate needs annuity designed for older people facing long-term care costs.
In exchange for a one-off payment, the individually underwritten annuity will pay an income directly to a registered care provider. These direct payments will be free of tax.
Income can be increased by up to 10 per cent a year, according to Just Retirement.
Stephen Lowe, group external affairs director for Just Retirement, said: “New rules are set to come into force in England in two years’ time which will ensure everyone except the very poorest will have to pay towards their own care.
“It could be a catalyst for huge growth in the sector, particularly as research suggests six or seven times more people could benefit from immediate needs annuities than currently buy one.
“Going forward we expect the reforms to place far more emphasis on information and advice to encourage many more people to seek professional expertise to help explore all their options.”
The government’s Care Bill concludes its Committee stage today (4 February), taking one step closer to becoming law.