New Approach From Government In Bid To Solve Later Life Care Crisis
Over-40s will pay more tax or be compelled to insure for later life, in new plans from the Government in a bid to solve the later life care crisis.
Proposals for over-40s to begin paying more tax are being mulled over by the Government and the Department of Health and Social Care, according to an exclusive in The Guardian today (27 July).
Modelled after Japan and Germany’s later life funding systems, the proposals suggest over-40s should be either taxed via payroll or take out insurance to pay for later life care – and protecting valuable assets like family homes being used to pay for care.
Expert Opinion“It’s a relief that after years of ignoring the later life crisis the Government is now taking active steps to ensure the future of our elderly and vulnerable. However, there are serious implications that need to be considered.
“There will inevitably be pressure points that the Government has to take into account with a system like this. Those with lower incomes may not be able to afford the increased outgoings, plus those approaching retirement age will be short-changed.
“That being said, if the kinks can be worked out ahead of any system being put in place then we could see everyone in the UK with a dedicated savings pot for care – something not everyone thinks about making unless they’ve experienced the care system themselves with an older parent or relative.” Nicola Hawkins - Associate Solicitor
Research from the leading national law firm with the Centre for Economics and Business Research (Cebr), produced before the coronavirus crisis, found the social care funding gap was set to increase to £2.5bn by 2024/25, and that workers needed to be saving £575 a month into their pension in order to pay for later life care.
If left unresolved, the UK’s ability to support tens of millions of elderly people was set to collapse by 2029, leaving potentially millions of elderly people without reasonable care for their later years.
Nicola continued: “Planning for care and planning for later life need to go hand in hand to ensure the right safeguards are put in place. Looking at Japanese and German models means we can learn from their pros and cons, and taxing everyone makes it a fairer system.
“If insurance plans were to be introduced, these would need to be compulsory to get the British public saving for later life, otherwise it would fall to the wayside – and we can’t risk that happening if we’re to avoid the later life care system imploding.”