Auto-enrolment scheme proposed to fund social care

Summarised from 2 outlets · Updated 12 Oct, 23:57 · Archive

A former pensions minister has proposed automatically enrolling people aged 40 and over into a social care savings scheme, similar to workplace pension auto-enrolment.

Sir Steve Webb, a former Liberal Democrat pensions minister now at Lane Clark & Peacock consultancy, has proposed an auto-enrolment scheme for social care funding in England. The model mirrors the workplace pension initiative that has enrolled over 11 million people since 2012.

Under the proposal, taxpayers aged 40 and over, including pensioners, would be automatically enrolled to pay a social care premium. According to the Daily Express, this would be equivalent to an extra 1% on basic rate income tax, with maximum monthly payments just over £30. Participants could opt out if they chose.

Those who remained in the scheme would receive discounts on future personal care costs based on contribution length. The Daily Express reports that after one year contributors would receive a 4% discount, rising to 8% after two years. Someone who contributed for 25 years would be fully exempt from paying towards their personal care costs.

Sir Steve argued that the scheme would allow people to pool risk of catastrophic care costs, helping protect asset values. He said such an approach could solve the 'thorny problem' of social care funding in an era when more people face frailty in old age.

How it is being reported

• Britons could be automatically enrolled into social care savings schemeMillions of Britons could be automatically enrolled into a new savings scheme to help cover social care costs later in lifeDaily Express · 12 Oct, 23:37
• Auto-enrolment scheme could help fund social care, says former pensions ministerA similar approach to workplace pension saving could be used to help solve the ‘thorny problem’ of social care funding, Sir Steve Webb said.Evening Standard · 12 Oct, 00:01

In this story: Sir Steve Webb · Liberal Democrats · Lane Clark & Peacock · England

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