Later life care fund idea gaining in popularity

15 July 2019

Nearly half of people would be happy to save into a fund for care bills, if the money could be left to family when they die. 

In a nationwide study carried out by insurer AIG Life, a special fund which could be passed to beneficiaries was ranked the most popular option by (48%) of people, with just 16% of people against the idea.

The research found 69% of people believe they will need care at some point, while 20% were unsure and only 11% were confident they will not need any support in later life. On average, people expect they will need either care at home or in a care home at the age of 76.

As the debate around the cost of social care continues to rage on, AIG questioned 3,000 adults on six options including tax rises and an increase in the retirement age as potential solutions to the funding crisis.

Respondents were evenly split over the idea of paying more income tax, with 34% in favour and 33% against the idea. Similarly, 31% of respondents found the concept of paying a social care tax after a certain age acceptable, while 30% felt the opposite.

However, the majority were against paying more tax on assets or property, or increasing the retirement age. The least popular option was selling homes to cover the cost of care, with just one in five (20%) deeming it an acceptable solution.

Around one in three (31%) said the current threshold of £23,250 in savings over which anyone with more has to pay for local authority care was about right, while 42% agree with the current system for NHS funding of social care and support.

Alison Esson, propositions manager, AIG Life, said: “People are realistic about the potential need for help in later life. Increasingly people are living longer and more people will see their 100th birthday over the coming decades, which is likely to mean more demand for care, even if it’s a little help each week to look after you in your home.

“People accept that funding for more social care will have to come from somewhere and that they may have to provide the money in some form. However, it is a debate that has a long way to run.”

Professional Paraplanner