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One year on ABI publishes an update on the Social Care Funding Statement of Intent

The ABI has today published an update on the Social Care Funding Statement of Intent.

The update outlines, the important areas of both the progress made and additional work required regarding the funding of social care provision, following the statement of intent which the industry launched with the Department of Health in January 2014.

The following issues are included in the progress update:

  • The new guidance service Pension wise gives individuals with defined contribution pensions the right to free and impartial guidance at retirement. It is a critical opportunity to build awareness of the need to pay for care, and the scope of Pension wise must be wide enough to meet this objective.
  • The Government’s commitment to a public awareness campaign is an important building block to ensure people understand their options, and the industry is keen to work with Public Health England at an early stage to help shape the campaign.
  • The role of local authorities in providing individuals with financial information and guidance, including how to access regulated advice, is crucial. We were disappointed not to see a stronger requirement in the statutory guidance on local authorities to actively help and direct self-funders to a regulated financial adviser. It is now vital that the practice guidance gives local authorities the help they need to achieve this.
  • The Budget reforms have addressed a number of tax changes and product rules which were identified in the Statement as important to deliver more flexibility for products to fund for care needs. However, much detail still needs to be worked through.
  • It is vital that people advising on care products are suitably qualified to do so.

Read the progress update (pdf 207kB)

Yvonne Braun,  Director, Long Term Savings Policy, ABI comments:

"Insurers have an important role to play in helping people plan and pay for their retirement needs, including social care costs. There is no ‘silver bullet’ for social care insurance policy and little public appetite to buy stand-alone products to pre fund future social care costs, during people's working life. Instead, more flexible retirement income products and protection products which can convert into social care cover are likely to emerge to help people plan for care. We have been working closely with the Government to create the conditions needed for greater use of financial services products in this area.

"The Government's incoming pension reforms will increase choice, flexibility and personal responsibility and insurers are working flat out to be ready for their introduction. From these changes we expect the growth in more flexible retirement income products that can help people pay for any future social care needs."

Last updated 01/07/2016