A New Social Care Savings Plan
There is some resentment at the present method of financing social care because people see it eating away the savings they hoped to pass on to their heirs and successors and they want someone else, the taxpayer, to fund it instead.
Demographic changes will affect the numbers who will need to access it. As fewer die earlier in life and more live into old age social care for an ageing population will raise its costs. But there is an alternative, one in which the care that people might need in age is paid for by themselves when young.
The idea is simple: Everyone puts a little aside during their working life into a personal Social Care Fund (SCF). That fund grows over time, belongs to them, and is there if they ever need care when they’re older. If they never need care, the money passes on to their heirs and successors.
It would work with automatic savings: About 5% of pay would go into their SCF, 3% from them, and 2% from their employer. Government would help with extra top-ups for low and middle earners, and bonus matches to encourage saving.
People could be assured that it would be your money and your choice, You would choose from a list of safe, approved funds. Balances would be fully portable and always your property. If you need care later, bills are paid directly from your SCF with no paperwork hassle.
Some people need only a little help, while others face years in residential care. To keep it fair, your SCF pays first. If lifetime care costs go above £200,000, a national safety net kicks in and covers the rest. So nobody faces unlimited costs.
What it means in practice is that a worker on £35,000 who saves from their 20s could expect a fund of around £140,000 by 60. If they later need 3 years in residential care (about £135,000), their SCF covers it. If they never need care, their family inherits the full balance.
This would be both fair and popular because everyone would have money set aside for their own care, not just a claim on future taxpayers. Nobody would be bankrupted by long care needs thanks to the stop-loss safety net.
Crucially, if they don’t use it, it becomes part of their estate. There would be clear rules, low costs, and their account would always be visible on a simple app.
The selling point to the public might be, “Save a little now, own it yourself, protect your family, and guarantee your care if you ever need it.”
It would restore both dignity and security to what is becoming an increasing problem, given demographic changes.
Madsen Pirie