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Social Care Funding

The IFoA together with Independent Age have produced a joint report, Will the Cap Fit? What the government should consider before introducing a cap on social care costs, assessing changes to social care funding policy and the potential implications of those changes. The report aims to encourage Government to develop a social care system that is sustainable in the long term as soon as possible as the current system is in crisis and is likely to worsen in the face of an ageing population. 

What you will get from the report

  • An understanding of why the current social care system is unsustainable and in crisis
  • An assessment of various proposed levels for a cap on care costs  and the impact those levels will have on cumulative care costs
  • Policy recommendations for Government

Insight

A carefully designed care cap could provide a means of social insurance, which previously has not existed, in order for families to plan for later life with certainty. Our report assesses the amount individuals would have to contribute towards their own care based on:

  • A £35,000 cap, based on the Dilnot Report
  • A £72,000 cap, contained in the Care Act
  • Our proposed all – inclusive £100,000 cap

These scenarios are applied to a range of typical pensioner households, varied by gender, age, region, and level of assets and income on starting to pay for care. This allows us to demonstrate the impacts and likelihood of individuals benefitting from a cap or means-test based on their specific circumstances.

Download the report >

Results

We recommend implementing an all-inclusive cap of £100,000. This would cover all cumulative care costs, unlike the caps proposed in the Dilnot Report or in the Care Act. This would provide individuals, who have the means to pay for their own care, clarity on their likely future care costs, with them having to pay for the first £100,000  and costs beyond this met by the state. This would reduce complexity and make the balance between individual and State provision easier to understand.

Key findings include:

  • An ‘all-inclusive cap’ set at £100,000 protects those who live longer than average in residential care and truly caps the full range of care costs for those with high care needs. 
  • Unless the cap is all-inclusive, taking into account accommodation and daily living costs, individuals will pay more than £150,000 by the time they have been in care for six years and £300,000 by the time they have been in care for ten years.
  • The £100,000 all-inclusive cap reduces variation in total care costs between regions in England. Under the £72,000 cap, care costs can vary by over £130,000 by year 6 between the North East, where the costs are lowest, and South East, where the costs are highest. The £100,000 all-inclusive cap reduces this variation to just £2,000.
  • Only the £35,000 cap, proposed by the Dilnot Report, and the all-inclusive £100,000 cap will provide protection to those who live longer than expected in residential care.

Related documents

Contact Details

For further information on any of our public affairs or policy work please contact us on:

policy@actuaries.org.uk

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Events calendar

  • Implications of 2019 IFRS 17 Exposure Draft

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    24 July 2019

    Fully booked.

    The International Accounting Standards Board (IASB) recently published an Exposure Draft (ED) of limited changes to its insurance contracts standard IFRS 17, effective date 2022.

  • Insurance Investment Roundtable with the IFoA & PRA - 25 July 2019

    EY Offices 1 More London Place London, SE1 2AF
    25 July 2019

    Spaces available

    The IFoA hosts regular roundtable meetings with the PRA on best practice in insurance investment and the application of the Prudent Person Principle, which governs insurance investment under Solvency II.

  • SIAS Event: Climate Zero to Climate Hero

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    3 September 2019 - 4 September 2019

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    An introductory session to help you get ahead with climate change.

    • Science, terminology and initiatives: handy facts to keep in your back pocket 
    • Getting your point across: how to influence people and avoid common traps and pitfalls
    • Taking action: what are actuaries expected to do...and what are we actually doing?
  • KSS event – The Regulatory Perspective

    Deloitte Saltire Court 20 Castle Terrace Edinburgh EH1 2EG
    5 September 2019

    Spaces available

    This KSS talk, presented by the FCA Head of Department in Scotland, will focus on the following 3 main areas:

    • FCA business plan priorities
    • The future of regulation
    • FCA Engagement in Scotland
  • Sessional Research Event - Risk Margin Working Party

    Staple Inn Hall, High Holborn London, WC1V 7QJ
    9 September 2019

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    For life insurers in the UK, the risk margin is one of the most controversial aspects of the Solvency II regime. Following its implementation, the risk margin came under considerable criticism for being too large and too sensitive to interest rate movements. These criticisms are particularly valid for annuity business – such business is of great significance to the national system for retirement provision. This criticism has led to political interest, and the risk margin was a major element of the Treasury Committee inquiry into Solvency II.

  • GIRO Conference 2019

    EICC, The Exchange, 150 Morrison St, Edinburgh EH3 8EE
    24-26 September 2019
    Spaces available

    GIRO is attended annually by over 800 delegates and speakers who are keen to discuss key topics such as Pricing, Reserving, Modelling and the future of the insurance industry. GIRO 2018 was a huge success and we have opened bookings early for what we hope will be another brilliant conference at the EICC in Edinburgh this year. 

     

  • The Future of the Actuarial Profession

    Staple Inn Hall, High Holborn London WC1V 7QJ
    3 October 2019

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    Three actuaries – and CEOs – discuss their views on how the business world is changing and what that might mean for actuaries in the future.

  • Life Conference 2019

    The Convention Centre Dublin, Spencer Dock, North Wall Quay, Dublin 1
    20-22 November 2019
    Spaces available

    The Life Conference is the premier event for professionals interested in life insurance.  Offering a wide range of workshops and plenary sessions it’s the perfect opportunity to discover what’s hot and current in life insurance ensuring you get up to date on the latest thinking and innovation whilst meeting and exchanging ideas with a broad range of professionals.

  • Autumn Lecture 2019, London - Rt Hon Nicky Morgan MP

    Lincoln's Inn The Treasury Office, London WC2A 3TL
    2 December 2019

    Fully booked.

    The IFoA is pleased to announce that this year’s Autumn Lecture will feature the Rt Hon Nicky Morgan MP as its guest speaker.  Nicky has previously served as Financial Secretary to the Treasury and Minister for Women. She now chairs the Treasury Select Committee whose remit is to examine the expenditure, administration and policy of HM Treasury, along with all of its agencies and associated bodies.

  • Autumn Lecture 2019: Live Streaming

    Webinar 
    2 December 2019

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    Watch the live stream of this year's Autumn Lecture with guest speaker Rt Hon Nicky Morgan MP.