A recent report from think-tank Demos has suggested that people should be ‘nudged’ into planning for their long-term social care costs.
The think-tank proposes that people should be required to undergo a financial ‘health-check’ before receiving their first State Pension payment, in the form of an online tool providing tailored feedback as well as prompting next steps.
The report argues such a step is necessary to ensure people are making provisions for their social care. It also explores new concepts for enabling people to pledge housing equity towards future care costs.
It is estimated that around a third of people will need long-term care at some point in their lives, and the recent Dilnot review in England and Wales found that half of over-65s could expect to pay care bills of up to £20,000, with one in ten facing costs of £100,000 or more.
However, the Demos report cites figures showing four in ten people are unaware they might need to pay for their care and support later in life, with 63% saying they have hardly thought about how to pay for social care needs in the future and 72% saying they have not started to prepare.
The health-check would encourage people to give some much-needed thought to their assets, liabilities, planned future income and possible future care needs.
Duncan O’Leary, Deputy Director of Demos and co-author of the report, said:
“Once-in-a-generation reforms to social care risk being undermined by a lack of public awareness about how much later-life care costs and who foots the bill. People should be expected to stop and think when they reach retirement age, so that more of us put money to one side for care.”
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