Pensions  

Prime Minister vows to fix social care crisis

Prime Minister vows to fix social care crisis

Newly appointed prime minister Boris Johnson has vowed to fix the UK’s social care crisis, which he promised would be one of his first actions as he takes office.

Delivering his first speech as PM yesterday (July 24) outside 10 Downing Street, Mr Johnson said: “My job is to protect you, or your parents, or grandparents, from the fear of having to sell your home to pay for the costs of care.

“We will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve”.

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.

The government has been working on a green paper to solve the social care funding issue but its publication has been delayed several times.

Earlier this month, Secretary of state for Health and Social Care Matt Hancock, said the document, which is expected to propose an array of solutions for the funding of later life care, wouldn’t be published until a new prime minister was in place.

At the time, he said the delay was due to the government not getting the "sort of cross party support that is hugely helpful for projects like this".

Mr Hancock, who is in charge of delivering the paper, was reappointed to the role in yesterday’s cabinet reshuffle.

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 2017, 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 summer 2018 but has faced several delays.

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.

Several experts have said social care had to be one of Mr Johnson’s top priorities.

Steven Cameron, pensions director at Aegon, said there was a “pressing need” to deliver the long overdue promise of a new deal on social care funding.

He said: “As the House of Lords recently reported, the government urgently needs to put the future funding of social care on a sustainable footing. Our ageing population deserves clarity on what the state will pay for and what individuals will have to fund themselves, based on their wealth.

“We support Boris [Johnson’s] desire for cross-party consensus here. There must be an increased commitment to central government funding to remove the current postcode lottery, and a cap on the overall amount anyone will have to pay themselves, allowing people to plan ahead and protect inheritance aspirations.