CII REPORT: PENSION “TREASURE TROVES” ARE NOWHERE NEAR BIG ENOUGH FOR LATER LIFE CARE, SAYS SAGA.

DR ROS ALTMANN

DIRECTOR-GENERAL, SAGA

PRESS RELEASE

September 14, 2011.

CII REPORT: PENSION “TREASURE TROVES” ARE NOWHERE NEAR BIG ENOUGH FOR LATER LIFE CARE, SAYS SAGA.

The glammed-up treasure trove of private pension pots could turn to dust for the majority of the population requiring care in later life.

Dr Ros Altmann, Director-General of over-50s group Saga, says that the findings of a report by the Chartered Insurance Institute (CII), entitled “Who cares?”, highlights that despite the recent Dilnot Commission, the public remains unaware of the real cost of long-term care and the need to make personal provision to meet costs.

“Around 80% of people have no idea of how much they will have to pay for care, and around half think long-term care is free at the point of use - but today’s average pension pot will fall well short of funding long-term care costs for the one in four of us who will need it,” said Dr Altmann, who has written a chapter of the report.

“According to the Dilnot Commission on Funding of Care and Support, the current average long-term care bill is £26,000 a year, the average length of stay in a care home is two years, but the current average pension income is often only £10,000 a year, leaving a huge annual deficit.

“The key is developing an awareness and national culture of saving for later life. While private pensions may have been sold as later-life treasure troves alongside images of Mediterranean villas or sumptuous retirement apartments, the fact is that we’re in the midst of a pensions crisis which will provide many people with a far more down-to-earth later life – but the impending care crisis will dwarf it by comparison.

“There is not enough money being put aside privately or publicly, and the vast majority of the population is hoping they won’t need care, when statistically at least one in four people will need it.

“The Dilnot report highlights how failure to adjust social care policy over time has left care under-funded across the board – at national, local and individual level. The welfare state was designed in the 1940s, when the idea of millions of people living to advanced old age was unheard of. Policy has failed to move with the times and is not fit for the 21st century.

“Past Governments have failed to help people prepare for care, even though at least one in four of us will require expensive care in later life. The current system of long-term care funding is haphazard, inefficient and unsustainable.

“Government spends over £100bn on benefits, over £50bn on the health service and just £8bn on care, leaving millions of vulnerable older people at risk. The issue is that people are now living so much longer than before, which is actually great news, but our support systems are being overwhelmed.

“This means most people’s whole life savings are at risk, but many do not realise this. Of course, unlike pensions, not everyone will need care, so insurance against future care costs is one obvious potential solution. However, potential care costs that need to be insured against are unlimited, so it is impossible to find affordable insurance to give full peace of mind, and it is difficult to devise policies that will provide real peace of mind.

“There are potential solutions that could be introduced, though: For example, Care ISAs, allocating an annual pension-style allowance to provide for care, incentivising employer care plans with proper tax relief, adapting annuity rules to allow pension funds to be used to buy ‘Care Pension Annuities’, with a lower starting income but which would then provide much larger sums in later life if care is needed.

“Equity Release is inevitable, since most people needing care will probably have to access some of the value of their property; Another potential savings product that would be facilitated by a cap on private care costs would be ‘Family Care Plans’. Four family members could club resources together and save in a joint-account to ensure, say, that one of them will have their care needs covered up to the cap.”

Ends
Further information:
Dr. Ros Altmann
Director-General, Saga
ros.altmann@saga.co.uk
www.saga.co.uk
07545 504513
Twitter @SagaRosAltmann
Saga Press Office
01303 771529.

Iain Macauley
im@pressrelations.co.uk
07788 978800

DILNOT CONFIRMS AT CARE CRISIS SEMINAR: THERE MUST BE A CAP ON PERSONAL CONTRIBUTIONS TO CARE COSTS.

DR ROS ALTMANN
DIRECTOR-GENERAL, SAGA
PRESS RELEASE

June 7, 2011

DILNOT CONFIRMS AT CARE CRISIS SEMINAR: THERE MUST BE A CAP ON PERSONAL CONTRIBUTIONS TO CARE COSTS.

The problem of paying for long-term care for the elderly must involve them being willing to use part of the value of their homes.

This was one conclusion reached today (June 7) at the Saga Care Crisis Seminar with Andrew Dilnot, who is heading the independent commission into the funding of care.

Saga Director-General Ros Altmann, who was chairing the meeting, asked if any of the group, who are all leaders in the care industry, believed that home-owning pensioners should not have to pay for care from the value of their houses – and not one disagreed.

But Mr Dilnot, whose report is due out in July, made it clear that he felt there should be a cap on contributions so everyone still had something left over to pass on to their children.

He said it was clear that all three main political parties accepted that it was crucial for there to be a new system of paying for care, the cost of which is set to soar as people live longer.

“What we have at the moment is a nightmare,” he said. “There must be more resources – both public and private.”

There had to be an acceptance that people would have to meet some of the costs themselves but governments also had to accept that the state must be ready to protect people from “catastrophic losses”.

Ros Altmann added: “In a civilised society, the state will have to ultimately pick up the tab.”

She said that the private sector needed to get involved, too, as it was in the provision of pensions.

Among other issues discussed at the seminar were how more older people might be kept in their own homes and how health service money could be better used if it was spent on preventing health problems which resulted in the need for care.

One of the participants, Lord German, called on the provision of care to become a fundamental right. He said a post-code lottery existed at the moment because much of care is funded through local authorities and so how much anyone got depended on the policy of their council.

He added: “We need a system that is national. If it’s a universal system, it will be a universal right. And it should be one of the fundamental rights to receive care.”

Ends

Further information:

Dr. Ros Altmann
Director-General, Saga
ros.altmann@saga.co.uk
07545 504513
Twitter @SagaRosAltmann

Iain Macauley
im@pressrelations.co.uk
07788 978800
Twitter @Press_Relations

THE MONSTER OVER THE HILL – THE CARE CRISIS LOOMS. DILNOT TO LEAD JUNE 7 DEBATE.

DR ROS ALTMANN
DIRECTOR-GENERAL, SAGA
PRESS RELEASE

June 6, 2011

THE MONSTER OVER THE HILL – THE CARE CRISIS LOOMS.

DILNOT TO LEAD SAGA'S SEMINAR IN SEARCH FOR SOLUTIONS.

Some of the most informed, visionary and influential people in social care will gather in London on Tuesday, June 7, 2011, in a bid to tackle the looming UK care crisis - the monster over the hill.

Andrew Dilnot, chairman of the Government’s Commission into Care Funding, will lead the debate at the Saga Care Crisis Seminar, which will be chaired by Dr Ros Altmann, Director-General of over-50s organisation Saga, and attended by a selection of the most senior care sector influencers.

“History is littered with ‘told-you-so’s’ – those of us who have a frontline appreciation of care issues are screaming that there’s a monster over the hill, but the policymakers either don’t see it, or are so dumbstruck by the magnitude of the threat that they’re frozen to the spot, and unable to respond or react,” said Dr Altmann.

“The care issue is invisible to many, but monstrous to those with direct care sector contact. The combined expertise and brainpower around that table on Tuesday knows that a care catastrophe is fast – and relentlessly – approaching.

“It is essential that we move on with reform of care funding – quickly and decisively - before we are overwhelmed. If we believed the pensions crisis was crippling, the care crisis has the potential to be far, far worse.  If someone does not have enough pension, they may be able to wait a bit.  But once someone needs critical care, they cannot wait at all.

“Very few people have earmarked any money for care needs. They just hope someone will look after them if the need arises. At least with pensions most people have done some saving, but, when it comes to care, there is no private provision - people just have to find the money at the time, and this can mean losing all their assets.

“The seminar will generate some definitive and do-able solutions, because, frankly, in the past, policymakers have come up with very little, have disguised petty political differences as insurmountable operational and organisational issues, and simply failed to make progress. Time is now running out in more ways than one.

“The crisis is creeping up on us. We must recognise the potential for the issue to overwhelm the system before it’s too late.”

Ends

Further information:

Dr. Ros Altmann
Director-General, Saga
ros.altmann@saga.co.uk
07545 504513
Twitter @SagaRosAltmann

Iain Macauley
im@pressrelations.co.uk
07788 978800
Twitter @Press_Relations