The Care Isa is not the answer to social care

Simon Read

Simon Read

I have had an exclusive peek at the government’s next Isa. 

According to a top secret memo I found left on the 5.15 to Brighton, the Tories plan to launch what they’re going to call a Debt Isa.

The memo was penned by Epaphroditus Self-Serving, a 19th-century Tory.

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It concludes: “If we make borrowers put up to £20,000-worth of debt into a tax-free Isa then we can ensure that loan companies that provide an important social service don’t have to be lumbered with the additional administrative burden of paying tax on the extra charges and interest they load on feckless debtors.”

His view is that such a move would be good for the UK economy and, as he reveals in the memo, the fact that he invests heavily in the lenders did not affect his thinking one jot. 

He claims the proposal already has considerable support among other leading Tories who, coincidentally, also invest in such lenders.

So will we see a Debt Isa being launched this year? Of course not. It is a preposterous idea that I just made up. But it is no more preposterous that the so-called Care Isa which is apparently being considered by the government.

We all know there is a long-term care funding crisis. Many more people are likely to need to find cash in their later years to pay for care. But very few are preparing for that potential cash crisis.

Just one in ten people aged 55 or over has money stashed to pay for care in old age, according to research published earlier this month by consumer group Which?

As Chris Knight, boss at Legal & General Retail Retirement puts it: “It is all too easy to think that we won’t need the support of social care in the future, that ‘it won’t happen to me’, but many us will either need to be cared for or care for a loved one at some point in our lives.”

The government is well aware of the problem and the Department of Health and Social Care will publish a green paper in the autumn with some proposed solutions.

A spokesman for the department said: “It will set out our plans to reform the social care system to ensure it’s sustainable for the future. In developing the green paper we are looking at how we can support people with the costs of their care in a way that is fair to all generations.”

News about the so-called Care Isa which could form part of the green paper were leaked to a Sunday newspaper in a kite-flying exercise. It is what the government does when it it is not sure about a policy. 

If the kite prompts cheers, then the policy is likely to be adopted. If it gets jeers, then the proposal will be quietly forgotten. Let us hope it is the latter when it comes to this particular half-baked idea.