Social care shake-up is huge opportunity for advisers

Social care shake-up is huge opportunity for advisers

The government’s long awaited social care green paper could bring "huge opportunities" for advisers to help their clients, Aegon has said.

Steven Cameron, pensions director at the provider, told FTAdviser measures included in the paper would open up opportunities in tax and inheritance planning, as well as pension decumulation and other retirement wealth planning.

Mr Cameron said finding a sustainable way to fund social care was one of society’s greatest challenge due to the ageing population.

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He said: "That’s why it’s so important that the government consults on and reaches a decision on sharing costs between the state and individuals.

"And there must be a cap on individual care contributions, so individuals can plan ahead, with help from advisers."

The government, which is working on a green paper on this matter, has already said the future model of social care won’t be solely funded by taxpayers.

It is estimated just 12 per cent of adults aged 55 or over are currently putting aside money to pay for social care later in life.

Former prime minister David Cameron had promised to implement a cap on the cost of care of £72,500, which was supposed to come into effect in April 2016.

But in 2015 the government pushed this back to 2020, because it would have added £6bn to public sector spending at a "time of consolidation".

In December the government confirmed the proposed cap would be scrapped while a green paper on long-term reform was put together.

The publication of this paper was originally expected in the summer but has since been pushed back to the autumn, and the government has since hinted the publication could be delayed further due to "unforeseen circumstances".

Several solutions for the care funding problem are said to be on the table, including the ‘Care Isa’ – a capped savings product, exempt from inheritance tax – and a 'care pension', which mixes drawdown and care insurance.

Matt Hancock, secretary of state for health and social care, has said that creating a solution similar to auto-enrolment for social care was also an option.

The committees for Housing, Communities and Local Government and Health and Social Care have meanwhile called for the introduction of a ‘Social Care Premium’, a tax for people over the age of 40.