Aegon Research Shows People Unwilling To Sacrifice Their Home To Cover Social Care Costs
Two thirds believe costs should be shared between the individual and the Government- 9 in 10 (87%) favour an overall limit on individual contributions
- Saving through a pension is most popular way of making advanced provision
As the Government prepares to consult on how best to cover the costs of social care, new research from Aegon sheds light on people’s attitudes towards what proved to be a particularly controversial topic ahead of the General Election.
Predicting whether you’ll personally need social care in old age is very difficult. But only 1 in 5 (21%) said this was quite or very unlikely. Almost twice as many (38%) said they were quite or very likely to need it. The remaining 2 in 5 (41%) couldn’t say how likely it was they’d need it.
Who should pay for care costs?
When it comes to meeting the costs, two thirds support sharing the cost between individuals and the government. Only 1 in 4 (26%) believe the Government should pay all costs, perhaps recognising that this could place an unreasonable burden on future taxpayers as more people need social care in old age. This finding was consistent across all age groups, showing positive signs of agreement on a topic which could divide generations.
Individuals willing to shoulder care costs but reluctant to sacrifice their home
As part of the deal on funding care costs, almost 9 in 10 (87%) believe there should be an overall limit on how much any individual needs to pay before the Government contributes. It is believed the Government will include a cap in its consultation.
The Conservative Manifesto set out plans to including the value of the person’s home when assessing whether the individual had sufficient assets to be paying towards their care. Aegon’s research found this may prove unpopular with 3 in 5 (61%) against including the value of the home. Objections were highest among older groups, with almost three quarters (73%) of those above age 65 against. This fell to half (53%) of 18-34s, perhaps reflecting the lower incidence of home ownership in this age group.
People interested in ways to prepare for care costs
Encouragingly, Aegon’s research has found that 56% of people would be very or quite interested in using a solution to funding long term care in advance. Surprisingly, the interest was strongest among 18 – 30s (72%), casting doubt over the perception that people leave thinking about funding social care until it’s too late.
When given a range of options regarding how they were likely to make advance provision for social care costs, two fifths said they would use their pension (43%). Selling their home or equity release was picked by less than one third (31%), reflecting many people’s reluctance to use their home. One in 5 (22%) expressed interest in some form of social care insurance policy, with the same percentage saying they would cash in ‘other savings’. The least popular option was a new Care ISA, favoured by only 18%.
Steven Cameron, Pensions Director at Aegon said:
“We should celebrate the fact that on average, people in the UK are living longer, but at the same time we need to face up to the growing crisis around how we pay for the increasing number of elderly who’ll need some form of social care. As the Government prepares to consult on this controversial but hugely important topic, our research has shown a keen interest across the ages in finding a fair solution.
“Only one in 4 people believe the Government should cover all costs, with the remainder accepting the need for individuals to pay their fair share. But a huge 9 in 10 (87%) believe there should be an overall maximum an individual should ever face paying, suggesting the Government needs to honour its pre-Election promise to include an overall cap in its consultation. Taking people’s house value into account when determining if people have sufficient assets to be paying for care may prove controversial with a clear majority of people unwilling to sacrifice their home.
“Encouragingly, the majority of people (56%) express an interest in making advanced provision for social care. Saving through their pension is the most popular route, favoured by 2 in 5 people, but to turn this into reality, people will have to increase contributions paid in. Selling or releasing equity from their home was chosen by less than a third of people. While insurance policies and a dedicated ‘care ISA’ are viewed as less attractive, there is a need to develop a range of options if we are to meet individual preferences and encourage as many people as possible to plan ahead.”
Responding to the survey Glen Garrod, Vice President of the Association of Directors of Adult Social Services (ADASS), said:
“This report is a useful contribution to the ongoing debate to finding a sustainable solution to funding adult social care which successive governments have failed to identity.
“Clear and wide-ranging options for consultation about putting the social care system on a more secure and sustainable long-term footing beyond 2020 need to be brought forward at the earliest opportunity for wide public consideration.
“This should aim to secure the right balance between the protection of private assets from catastrophic care costs and adequate public funding for those who have never been able to acquire such assets.
“We look forward to contributing to the discussion with Government and all interested parties in finding a long-term solution to funding for adult social care to future-proof this essential service for current and future generations.”
