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Social care crisis needs a simple, sustainable, cross-party solution


How we pay for care was one of the most heated issues during the election campaign. The parties must now come together to fix the problem

ay you’re saving for your first home and want to put away the correct amount every month. You aim to save up for a 10% deposit and a buffer for paying off the mortgage. You give yourself three years to save and start putting away a set amount each month. A reasonable saving strategy.

However, after chatting to your friends, you realise there are other costs like mortgage fees, legal fees and stamp duty. One of your friends also said they had to do quite a bit of work on their new place when they bought it, costing about £20,000. Unknown costs could be anything from £1,000 to £20,000. Now what’s the saving strategy?

The second scenario is essentially what people face when they attempt to figure out how much they need to save for social care, however on a much bigger scale as the unknown costs can run into hundreds of thousands of pounds. On top of this, under the current system it isn’t clear how much the government will contribute. Even those working in the wealth management industry struggle to wrap their heads around the complicated rules for means testing.

In 2015-16 the average cost of care per adult per week was £716 for long-term care, according to the Office for National Statistics (pdf). So if someone needed to go into care for the last five years of their life, this would cost them around £186,160. However, costs could be as high as £78,000 a year, according to non-for-profit company Paying For Care, which would translate to £390,000 for five years.

This issue is only escalating as the population ages rapidly. By 2045, almost a quarter of the population are expected to be over 65, according to the ONS. It’s unsurprising then that it was one of the most heated debating points during the election campaign. Social care dominated headlines as rival parties set out how they intended to fix a problem that’s burning a deep hole in the country’s pockets.

As the new government starts to consider the social care crisis, policymakers should look for an acceptable compromise for all parties via a cross-party parliamentary group. Social care policy should not chop and change with the political current. The question of social care is one that affects every generation and must be met with a sustainable long-term solution that offers everyone confidence they will have access to a reasonable standard of care in later life.

A cross-party parliamentary group should consider all possible options when it looks for the answer to this crisis. It should find a multifaceted solution that will encourage people to save for their long-term care. Current policies use a stick, threatening the public that care costs may drain their funds. An alternative is to use a carrot and incentivise people to save.

Whatever solution is reached, it needs to be simple, sustainable and communicated in consumer friendly language. Anything else will leave the public back at square one.

The power of simplicity has been touted by some of the great minds of history. However, when it comes to the debate around social care, it appears policymakers have yet to grasp this important concept.

Jane Goodland is responsible business director at Old Mutual Wealth


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