The Financial Vulnerability Taskforce (FVT) have made important proposals on how Immediate Care Plans could help fund later-life care.
This specialist long term care product offers a practical solution for helping people by using their pension savings to secure long term care funding while providing greater certainty and financial protection for families facing care costs.
An Immediate Care Plan is purchased when an individual has already identified care needs. In exchange for a single premium, the provider provides a guaranteed tax free income, paid directly towards registered care costs, for the remainder of the individual’s life.
The FVT is proposing that policymakers explore the creation of a care funding pension transfer, which would allow pension savings to be transferred directly into a qualifying Immediate Care Plan without triggering a conventional taxable pension withdrawal.
The FVT argue that because pension savings in the UK are now measured in excess of one trillion pounds, there is a significant opportunity to direct more of that wealth towards meeting future care needs. This would go a long way to solving the UK’s social care crisis.
With upcoming changes to inheritance tax prompting many retirees to re-consider their pension options, there is a huge opportunity to reinforce the original purpose of pension savings – namely provide security, dignity and financial protection in later life, including funding potential care needs. The FVT argue that the potential for a pension transfer to Immediate Care Plan offers the solution to the problem of people not knowing whether they will need long-term care and how much it will cost or how long it will be required.
Harold Stephens is a local, later life financial and legal planning specialist with a special interest in long-term care provision and tax efficient funding options. If you, or your loved one, are at the point of care need and are currently making important care funding decision then get in touch now for an initial chat with one of our specialist advisers by calling 0117 3636 212 or emailing office@haroldstephens.co.uk.
We will also be putting on some in person events throughout October and November in the local area covering the topic of care funding decisions and related later life financial and legal planning. Event details are updated regularly here: https://www.haroldstephens.co.uk/events/
