The vast majority of Britons are unhappy with the government’s proposals to fund social care and the most popular solution to the crisis is auto enrolment into an insurance product.
This is according to a survey of 1,151 people from AJ Bell which found four in five people in the UK hold a negative view about social care funding reforms announced in the autumn.
The survey found 79% of respondents view the reforms, which will see lifetime costs capped at £86,000 and the means-testing threshold rise to £100,000, as either quite negative or very negative.
More than half (57%) of those surveyed were very negative about the plans, saying they will never be able to afford £86,000 of care costs.
Just 5% of respondents quizzed by Findoutnow in December were very positive about the changes, while around one in six (16%) were quite positive.
But when asked for their views on alternative reforms to encourage people to save for social care, more than one in five (21%) agreed automatic enrolment into an insurance product would most encourage them to save for care, followed by a Care ISA with a 25% upfront bonus (16%) and tax-free pension access (15%).
However, most (57%) said none of these suggested reforms would encourage them to save for care.
Commenting on the findings, Tom Selby, head of retirement policy at AJ Bell, said: “After a decade of broken promises on social care funding, prime minister Boris Johnson at least deserves credit for putting forward concrete plans to address the social care crisis.
“Currently people can face unlimited social care costs. Under reforms outlined by the government last year, from 2023 lifetime personal care costs will be capped at £86,000 and the means-testing threshold raised to £100,000.”
The reforms will be funded through a controversial 1.25 percentage point increase in National Insurance rates for both employers and employees – although this cash is also being used to bolster the NHS.
Selby noted the relatively high level of the cost cap appears to be putting people off, with the vast majority saying they view the plans negatively.
“This comes as the prime minister faces growing concern over the timing of the planned National Insurance rise, with some cabinet ministers reportedly voicing disquiet over the impact it could have at a time inflation is soaring and energy bills are set to skyrocket,” he continued.
“This combined with negative voter sentiment will inevitably lead some to push for the changes to be delayed or shelved altogether.”
Demand-side reforms receive some support
Selby warned that while the £86,000 cap should help prevent catastrophic care costs, for the reforms to really work people need to save more to cover the risk or be willing to sell down their existing assets.
“There are various reform options that have been suggested to boost saving for long-term care,” Selby continued.
“Automatic enrolment into a care insurance product appears to be the most likely to encourage greater levels of saving (21%), followed by a Care ISA with an upfront bonus (16%) and increased tax-free pensions access (15%).
“However, perhaps tellingly, more than half of respondents (57%) said none of these interventions would encourage them to set aside cash to pay for long-term care in the future.”
