The government is “committed” to its current agenda for reform of social care funding and believes insurers are “fundamental” to doing so, despite an Association of British Insurers (ABI) report highlighting “significant” disincentives to developing products in the proposals.
Speaking at the ABI annual conference, economic secretary to the Treasury Andrew Griffith (pictured) noted the industry’s importance in supporting the UK’s aging population, but did not address making any changes.
The overhaul for social care funding was due to be introduced in October this year but has been put on hold due to the current economic crisis.
An ABI report last week said the pause was an opportune moment to make changes as the present form of rules would mean products would be unlikely to pass fair value tests under the incoming Consumer Duty.
It warned the reforms as planned would create a “significant” disincentive to insurers developing suitable products, with one of the key factors being the inclusion of insurance payments in local authority financial assessments.
‘Insurers are fundamental’
However, Griffith told delegates at the ABI annual conference that the government was intending to plough on with the much-criticised proposals.
“Ensuring we have the right social care system is one of the grand challenges of our time,” he said.
“Sad to say, a majority of us will develop a care need in our lifetime and, according to the Office for National Statistics (ONS), in 50 years’ time the number of people older than 65 is likely to grow by more than eight million.
“That’s approximately the size of London’s population.
“While the government has taken the difficult decision to delay charging reform to help local authorities meet current pressures; we remain committed to this agenda.
“And insurers and long-term savings providers are fundamental to delivering a step change in the way people plan and pay for care,” he added.