Plans for a new National Care Service (NCS) could put two-thirds of UK pensioners under pressure to sell their homes, and the proposals highlight again an urgent need for renewed attention to pensions savings.
The NCS would offer comprehensive care in their own home to elderly people, modelled on the NHS, and residental stays where required.
Other payment options currently being discussed to enable pensioners to avail of the NCS include regular savings plans, and restrospective payment through an inheritance tax of a possible 10% on their estate.
Another proposal would see workers extending their working life beyond the state retirement age (now 65, rising to 68 by 2044), with the state pension payments they would have received feeding into the NCS, to fund their participation in the scheme.
The Conservative Party’s model for funding a new National Care Service would involve pensioners making a payment of £8,000 for residential care in the home, payable on a voluntary basis to join the scheme.
Pensioners on low incomes and with no savings, however, would receive their healthcare for free.
Research shows that 64% of male pensioner households and 71% of female pensioner households do not have assets totalling £8,000, with the exception of their home. For pensioner couple households, who would be required to raise £16,000 to join the scheme, 63% do not have combined non-housing assets to foot the bill.
Equity release plans could be a solution for pensioners to raise money for the National Care Service. These enable homeowners to access the cash value of their home, while continuing to live there.
However, many pensioners may not have equity in their homes and for them, an investment such as a bond has been suggested as a viable alternative.
The launch of an NCS-style scheme would extend the need for financial planning for retirement, and add considerably to the already-pressing need for pensions advice and savings.
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