With the UK population ageing, deciding upon a satisfactory and sustainable system for the funding of people’s long-term care (LTC) needs has long been a topic of political debate. Phase 1 of the Care Act 2014 (“the Act”) brought in some of the reforms recommended by the Dilnot Commission in 2011. However, the Government announced during 2015 that Phase 2 of “the Act” such as the introduction of a £72,000 cap on Local Authority care costs and a change in the means testing thresholds 1 would be deferred until 2020. In addition to this delay, the “freedom and choice” agenda for pensions has come into force. It is therefore timely that the potential market responses to help people pay for their care within the new pensions environment should be considered. In this paper, we analyse whether the proposed reforms meet the policy intention of protecting people from catastrophic care costs, whilst facilitating individual understanding of their potential care funding requirements. In particular, we review a number of financial products and ascertain the extent to which such products might help individuals to fund the LTC costs for which they would be responsible for meeting. We also produce case studies to demonstrate the complexities of the care funding system. Finally, we review the potential impact on incentives for individuals to save for care costs under the proposed new means testing thresholds and compare these with the current thresholds. We conclude that:udud∙ Although it is still too early to understand exactly how individuals will respond to the pensions freedom and choice agenda, there are a number of financial products that might complement the new flexibilities and help people make provision for care costs.ud∙ The new care funding system is complex making it difficult for people to understand their potential care costs.ud∙ The current means testing system causes a disincentive to save. The new means testing thresholds provide a greater level of reward for savers than the existing thresholds and therefore may increase the level of saving for care; however, the new thresholds could still act as a barrier since disincentives still exist.
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机译：随着英国人口的老龄化，为人们的长期护理（LTC）需求提供资金的一种令人满意且可持续的系统决定一直是政治辩论的主题。 2014年《护理法》（“该法”）的第一阶段带来了迪尔诺特委员会在2011年建议的一些改革。但是，政府在2015年宣布了“该法”的第二阶段，例如引入了72,000英镑。地方当局护理费用的上限和经济状况审查标准1的变化将推迟到2020年。除了这一延迟之外，养老金的“自由和选择”议程已经生效。因此，应及时考虑在新的养老金环境中帮助人们支付护理费用的潜在市场反应。在本文中，我们分析了拟议的改革是否符合保护人们免于灾难性医疗费用的政策意图，同时促进了人们对其潜在医疗资金需求的理解。特别是，我们审查了许多金融产品，并确定了这些产品在多大程度上可以帮助个人为他们将要承担的LTC费用提供资金。我们还提供案例研究，以证明护理资助系统的复杂性。最后，我们回顾了在拟议的新的经济状况调查阈值下，个人节省护理费用的诱因的潜在影响，并将其与当前阈值进行比较。我们得出以下结论： ud ud∙尽管现在确切了解个人如何应对养老金自由和选择议程还为时过早，但仍有许多金融产品可以补充新的灵活性并帮助人们提供照护服务成本。 ud∙新的护理筹资系统很复杂，使人们难以理解其潜在的护理成本。 ud∙当前的手段测试系统导致了节省的动机。新的经济状况调查阈值为储蓄者提供的奖励水平高于现有阈值，因此可能会增加护理储蓄的水平；但是，新的门槛仍然可能成为障碍，因为仍然存在抑制措施。
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