Care in Old Age - Government Proposals

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Care in Old Age - Government Proposals

The previous Conservative government had suggested two possible approaches:

• Introducing partnership schemes for long-term care. These would work by letting people who take out insurance up to a given amount keep more of their wealth - on top of the normal capital limits - at the point where state funding kicks in
  
• Giving members of employers' pension schemes the option of taking a pension once they retire which increases in the later years of retirement, thus giving them more income at those times when they are most likely to face long-term care costs.

The wisdom of this latter option has to be questioned. In most cases, people do not invest enough in their pension schemes to provide an adequate standard of living in retirement, let alone to fund long-term care needs as well.

Until the government makes the next step clear, the key question for the present remains: how anxious are you to pass on your wealth to your heirs?

In the longer term, it seems possible either that it will become compulsory to make at least some advance provision for yourself. Alternatively, a two-tier system will develop where those who are forced to rely on the state have less choice and enjoy lower standards than those who can directly buy the care they need.