People unwilling to sacrifice home to pay for care
- Two thirds believe costs should be shared between the individual and the Government
- 9 in 10 (87%) favour an overall limit on individual contributions
- Saving through a pension is most popular way of making advanced provision
As the Government prepares to consult on how best to cover the costs of social care, new research* from Aegon sheds light on people’s attitudes towards what proved to be a particularly controversial topic ahead of the General Election.
Predicting whether you’ll personally need social care in old age is very difficult. But only 1 in 5 (21%) said this was quite or very unlikely. Almost twice as many (38%) said they were quite or very likely to need it. The remaining 2 in 5 (41%) couldn’t say how likely it was they’d need it.
Who should pay for care costs?
When it comes to meeting the costs, two thirds support sharing the cost between individuals and the government. Only 1 in 4 (26%) believe the Government should pay all costs, perhaps recognising that this could place an unreasonable burden on future taxpayers as more people need social care in old age. This finding was consistent across all age groups, showing positive signs of agreement on a topic which could divide generations.
Individuals willing to shoulder care costs but reluctant to sacrifice their home
As part of the deal on funding care costs, almost 9 in 10 (87%) believe there should be an overall limit on how much any individual needs to pay before the Government contributes. It is believed the Government will include a cap in its consultation.
The Conservative Manifesto set out plans to include the value of the person’s home when assessing whether the individual had sufficient assets to be paying towards their care. Aegon’s research found this may prove unpopular with 3 in 5 (61%) against including the value of the home. Objections were highest among older groups, with almost three quarters (73%) of those above age 65 against. This fell to half (53%) of 18-34s, perhaps reflecting the lower incidence of home ownership in this age group.
People interested in ways to prepare for care costs
Encouragingly, Aegon’s research has found that 56% of people would be very or quite interested in using a solution to funding long term care in advance. Surprisingly, the interest was strongest among 18 – 30s (72%), casting doubt over the perception that people leave thinking about funding social care until it’s too late.
When given a range of options regarding how they were likely to make advance provision for social care costs, two fifths said they would use their pension (43%). Selling their home or equity release was picked by less than one third (31%), reflecting many people’s reluctance to use their home. One in 5 (22%) expressed interest in some form of social care insurance policy, with the same percentage saying they would cash in ‘other savings’. The least popular option was a new Care ISA, favoured by only 18%.
Steven Cameron, Pensions Director at Aegon said:
“We should celebrate the fact that on average, people in the UK are living longer, but at the same time, we need to face up to the growing crisis around how we pay for the increasing number of elderly who’ll need some form of social care. As the Government prepares to consult on this controversial but hugely important topic, our research has shown a keen interest across the ages in finding a fair solution.
“Only one in 4 people believe the Government should cover all costs, with the remainder accepting the need for individuals to pay their fair share. But a huge 9 in 10 (87%) believe there should be an overall maximum an individual should ever face paying, suggesting the Government needs to honour its pre-Election promise to include an overall cap in its consultation. Taking people’s house value into account when determining if people have sufficient assets to be paying for care may prove controversial with a clear majority of people unwilling to sacrifice their home.
“Encouragingly, the majority of people (56%) express an interest in making advanced provision for social care. Saving through their pension is the most popular route, favoured by 2 in 5 people, but to turn this into reality, people will have to increase contributions paid in. Selling or releasing equity from their home was chosen by less than a third of people. While insurance policies and a dedicated ‘care ISA’ are viewed as less attractive, there is a need to develop a range of options if we are to meet individual preferences and encourage as many people as possible to plan ahead.”
* Research was conducted by Aegon with the Aegon UK consumer and customer panel. Total sample size was 651 adults. Fieldwork was undertaken in August 2017.
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Notes to Editors
In the UK, Aegon offers retirement, workplace savings and protection solutions to around two million customers, and employs more than 3,450 staff. More information: https://www.aegon.co.uk
- As an international life insurance, pensions and asset management company based in The Hague, Aegon has businesses in over twenty five markets in the Americas, Europe and Asia. Aegon companies employ over 28,000 people and have millions of customers across the globe. Further information: www.aegon.com
- Aegon is the Lead Partner of British Tennis.
Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 165548. An Aegon company. www.aegon.co.uk
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