In Focus: Retirement Income  

Altmann: Why we need a social care Isa

 

The government must help Britons build up funds for long-term care, while committing to improving our basic national care system, Baroness Ros Altmann has urged.

Speaking to FTAdviser In Focus for the latest Fireside Chat, Altmann said not only should the government ensure a better safety net for all people, but also consider ways to help people fund later-life care.

This could take the form of a "social insurance contribution, which everyone pays into", akin to a national insurance contribution.

"There should be ways of helping people fund care, whether that's part of a pension or care pension, or perhaps a care Isa fund to help people build up funds for later-life needs," she said.

Touching on the Queen's Speech to parliament on May 11, Altmann said: "This is the biggest disappointment I have right now. We do not seem to be anywhere closer to having the radical overhaul of social care that we need for our future. 

"We surely learned through the pandemic that social care is the poor relation of our brilliant National Health Service."

She added: "For decades we have had white papers and green papers and consultations, but the regulations that were needed were never introduced in practice.

"This is, for me, a great sadness and an indictment of our system. We have been world-leading and world-beating in the vaccine, and yet when it comes to looking after the frailest, most vulnerable people in the UK, somehow it has not been even close to the top of the priority list.

"I want to see a proper national system that helps people save for their own care. It is as important as pensions. We have trillions in pensions but there is almost nothing earmarked for later-life care, if people need it."

Altmann praised the idea of providing simple yearly statements for people to see the "amazing opportunity" presented by workplace pensions in particular, without jargon and obscure terms. 

"Maybe doing this would help people realise the power of pensions," she said. "Simple statements will help people create their own dashboard before we get the whizzy dashboard that we are all working on." 

She also urged the industry to sort out the legacy data issues to make sure that the dashboard will have people's pension information ready for 2023.

During the Fireside Chat, Altmann also raised the issues of retirement plans having had to change as a result of Covid-19, and the push towards a savings mentality that came about as a result of the pandemic.

She said: "Everyone will have started to think about the value of saving, and the importance of saving."

But she urged people to consider the "adequacy" of their pension savings. While auto-enrolment has been a fantastic measure, brought into force in 2012 to get more people saving, people need to make sure they are putting enough aside for their retirement objectives.