The proposal is for a compulsory contribution from working age adults in to an insurance scheme which will help to pay for the cost of their care should the need arise.
The think tank found that the current model of tax payer funded social care will lead to a disproportionate tax burden on younger people. Improving medical care has led to prolonged lifespans and a growing number of people who are past working age dependent on social care. They estimated that a 26 year old would pay a third more in taxes to fund social care than someone born just 10 years earlier.
The proposals are similar to a scheme already in place in Germany where a compulsory 2.55% of earnings is contributed by working age people to mitigate the costs of social care.
The proposal also recommends the scrapping of the winter fuel allowance and the triple lock on pensions to spread the cost burden over the inevitable transitional period during which working age people will be paying in to the new scheme as well as funding current social care recipients through taxation.
The costs of long term care can be daunting but there are a number of solutions available to meet the cost. No matter what your circumstances, having a financial plan in place will give you a much better chance of achieving security in later life so that you can enjoy your retirement and afford the right help should the need arise. The earlier you start planning, the better. Talk to one of our expert advisers, we can start helping you plan for a brighter, more secure and more prosperous future today.
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