People should be ‘nudged’ into planning for their long-term social care costs, according to a new report by think-tank Demos.
The think-tank proposes that people should be required to undergo a financial ‘health-check’ before receiving their first State Pension payment, in the form of an online tool providing tailored feedback as well as prompting next steps.
Demos claims that such action is needed because around four in ten people are unaware they might need to pay for their care and support later in life. Around 63% have not given any thought to how to pay for social care needs in the future and a further 72% say they have not started to prepare.
Many people vastly underestimate the likely costs of care: the mean figure suggested by those who think they know the cost is around £140 – far below the actual average weekly fee of £531.
The report also criticises social care funding as overcomplicated, leaving many people in the dark on what costs they are liable to pay.
Demos advocates a simpler system, which combines a person’s assets and income to calculate how many years of social care they could afford. Those able to afford fewer years would receive more Government support.
Les Mayhew, Professor of Statistics at Cass Business School and co-author of the report, said:
“Social care funding is still far too complex. Many will think they are entitled to public support when in fact they are not. The government needs to simplify the system or risk baffling people who want to know what their entitlements are so they can plan ahead.”
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