- Delay in public consultation leaves planning for social care costs in limbo
- Individuals could seek advice on building into broader retirement planning
- But Chancellor needs to resist any further Budget cuts in the pension lifetime allowance
Responding to Damian Green’s confirmation that the Government has deferred its public consultation on social care funding till next Summer, Steven Cameron, Pensions Director at Aegon sets out the consequences.
“The Government’s announcement of yet another delay in consulting on social care funding will come as a frustrating blow to those who had been hoping the Chancellor would kick-start the public debate in next week’s Budget. While it’s grudgingly accepted that preparations for Brexit are leaving little room for any significant new policies, the Government should be using the next 18 months to consult on and be ready to advance longer term policies. While the Government will be consulting privately with a wide range of experts in this field, this debate has been ongoing for many years and the public also deserve to have their say on what’s fair regarding sharing costs between individuals and the state. Social care funding will be a key societal issue impacting millions of us long after Brexit is a footnote in the history books.
“In the meantime, individuals who want to do the right thing and plan ahead for possible social care costs in later life have been left in limbo. One option is to seek advice on building this into broader retirement planning. The new pension freedoms grant individuals with defined contribution pensions complete flexibility on how much income to take from their pension year on year, and also removes previous penalties if funds are left unused on death. Individuals could consider setting aside part of their retirement pot so it’s there if needed to pay for care later. But this does mean pension funds will need to stretch further and the Chancellor must resist any further Budget cuts to the pension lifetime allowance, which is the maximum individuals can hold in a pension without suffering tax penalties.”
Further information on social care funding according to Aegon research can be found here: