Nine in 10 over-65s have no plan to pay for social care, says ABI
Many people could be sitting on a “social care financial time bomb”, the Association of British Insurers (ABI) has said.
It found nine in 10 (89%) over-65s have not made any plans to meet potential social care costs in future.
Only one in 10 in this age group have made plans, despite around half of care users having to self-pay in some way, according to the ABI.
It said new incentives should be considered to encourage people to make provision to pay for care in the future.
The ABI has sponsored a report from the Pensions Policy Institute (PPI), which looks at various possibilities for self-funding later life care.
These include the suggestion of introducing a new Care Isa with no inheritance tax paid on amounts left over at death and tax-free pension withdrawals if the cash is used to purchase an insurance product that covers care costs.
Yvonne Braun, director of policy, long-term savings and protection at the ABI, said: “The social care system and how it is funded desperately needs an overhaul.
“People simply aren’t preparing to pay for their care costs and this needs to change.”
She continued: “With only one in 10 over-65s making provision to pay for care, the size of the financial time bomb is clear for everyone to see.
“A major public awareness campaign is essential if we are ever going to get more people making financial plans for care.”
More than 2,000 people were surveyed.