Speaking at a social care event at the Centre for Policy Studies last night (July 16), Mr Green discussed proposals to fix the care crisis which were laid out in his Fixing the Care Crisis report on April 29.
At the event, Mr Green stressed that people should not be forced to sell their house to pay for social care costs but could instead downsize and release equity to pay for care but still have an inheritance to pass onto their children and family.
Also speaking at the event was Baroness Camilla Cavendish of Little Venice, former director of policy under prime minister David Cameron, who agreed that there needs to be more emphasis on keeping people in their own homes rather than building more care homes.
She said: "Nobody should have to sell their home to pay for care but the reality is that lots of people have to find some way to fund the level of care that they need."
Mr Green highlighted that people often took a bad view on the idea of downsizing but he said this need not be the case.
He said: "People need to ensure that their last home is the best one for them to see out the rest of their lives.
"People should be purchasing property which has everything they need, enabling them to live longer in their own property rather than needing a care home. For example, buying a bungalow so there is less of a chance that they will fall down the stairs and injure themselves."
Baroness Cavendish added: "I have found that people often overestimate what their house is worth which can also be a major barrier to people selling and downsizing in later life."
However, there has been a shortage of small properties for retirees to downsize to.
Research from equity release adviser Responsible Life found that the downsizing dilemma is so bad that there is double the number of four bedroom properties for every two-bedroom house in 16 per cent of places.
Steve Wilkie, managing director of Responsible Life, said: "Retirees consider downsizing to be one of the easiest ways to release some cash in retirement but many are confronted by a crippling lack of options.
"Across the country, there are significantly fewer smaller houses for sale and they are being fought over by three groups of people — downsizers, first-time buyers and those moving up the ladder.
"This lack of supply feeds into prices and unfortunately for many it’s just not worth downsizing once the cost of moving and Stamp Duty are taken into account."
At the event, Mr Green also stressed the importance of securing cross party consensus when it comes to fixing the social care funding issue saying that if this is not achieved "we will be back here in ten years time with the same problem".
To achieve a cross party agreement he suggested that Citizens' Juries should be set up over a 12-month period to discuss solutions to the social care problem. These recommendations would then be taken to each political party for them to agree and pass through Parliament.
Mr Green said: "The current social care system is unsustainable not just financially but also politically.
"Reforms to the system will take a long time to drive through but they are necessary to create a compassionate society for the increasing amount of older individuals."
Last week (July 10), Health and Social Care secretary Matt Hancock blamed the lack of cross party consensus on social care for the almost two-year delay of the social care green paper.
Speaking at a Health and Social Care committee, Mr Hancock said the document, which is expected to propose an array of solutions for the funding of later life care, won’t be published until a new prime minister is in place.
He explained that the green paper, first announced in December 2017, hasn’t been published because the government hasn’t been able to find a way to get the "sort of cross party support that is hugely helpful for projects like this".
Mr Green said that the new system needs to achieve four things:
- Secure enough money to cope with the ageing population;
- It must be fair both across generations and between individuals to ensure that nobody has to sell their house;
- It must lead to an increase in care beds and retirement housing; and
- It has to secure cross party consensus.
As part of the social care funding review, Mr Green suggested that people should be able to purchase a care supplement, which would be similar to an annuity or insurance policy, to ensure individuals have funds for more expensive care if needed in the future.
This money would come from individuals’ existing pension pots, lifetime savings or via equity withdrawal from people’s homes and would act as a top up to government funded state care.
When asked whether he believed there would be a market for this, Mr Green said: "It would be a brand new insurance product which the insurance industry could make money on, so why would they not be onboard with it?"
Previously at an Economic Affairs Committee hearing in May, Mr Green told the Lords that he was confident that the insurance industry "would rise to the challenge of making this a reality".
He said the majority of insurers he had spoken to agreed there was a market for this type of insurance product, although Mr Green admitted that Royal London had disagreed.
One company had told Mr Green that care supplements were "an obvious employer perk" where employers would purchase care supplements as a job inducement, in the same way that some employers offer their employees private healthcare.
amy.austin@ft.com
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