Lifting the lid on pension pots – implications for future funding of care
By Caring Times editor Geoff Hodgson
A conservatory, a car, a cruise, a celebrity style wedding, a care plan – these might be some spending choices facing people who this week find they suddenly have access to their pension pots. It is easy to understand why people who have been mis-sold pensions or whose funds have been poorly managed would want to take control of their own money. It is also easy to understand why a government might enjoy some of the immediate tax revenue that such a policy could bring to it.
What is less clear is whether or not this freed up money has implications for the care sector. It seems to boil down to three questions: if people did choose to purchase care plans, is the market in a position to offer enough of these? If the guidance offered by the Department of Work and Pensions is pointing enquirers in the direction of independent financial advice, will a sufficient number of these advisers have knowledge of what care packages might be available? Finally (and most significantly) will anyone want to spend their funds on something as seemingly unappealing if the alternatives are paying off a mortgage, taking a well deserved holiday or helping a child with a deposit for a house?
Looming large beyond these questions is the big one. Thirty years down the line might older people have less of their own money left to contribute to care costs? If this is so, who will pick up the tab? I am not suggesting that profligate pensioners awash with champagne will deliberately ignore the future, but today’s problems will inevitably press harder than tomorrow’s plans for many people.
- The CT Blog is written in a personal capacity – comments and opinions expressed are not necessarily endorsed or supported by Caring Times.