PTL, the leading independent trustee and governance services provider, today said that the recently announced plans for funding social care could be good for pension adequacy.
Richard Butcher, MD of PTL, commented: “Until now, successive governments have failed to come up with a plan for dealing with the costs of long-term healthcare despite several commissions and working groups being set up to produce policy recommendations. As a consequence, it looked likely that pensions would become the ‘de facto’ solution because the cost would have to be paid from what income there was.
“The recent announcements potentially change that narrative. Provided the proposed increase in national insurance is genuinely redirected to fund long term healthcare in due course, then pensioners won’t have to pay for social care out of their income. While accepting some pensioners are well off, the average pensioner isn’t. Reducing the demands on their income means the average pensioner will be better able to afford other things i.e. a net increase in adequacy. This can only be a good thing.”
More information on pension adequacy can be found in this blog.