Mazars says fund LTC by linking it to pension
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The logical way to fund long-term care is to automatically link it to pension income, acc-ording to audit and advisory firm Mazars.
Senior actuarial partner Peter Gatenby has acted as a special adviser on LTC to the health select committee inquiry and the royal commission on LTC.
He believes long-term care should be offered as part of a pension arrangement, where retirees take a lower starting annuity and increase their payments when they require long-term care.
Gatenby says the same concept would apply if drawdown was taken instead of an annuity. He says: “It would mean a smaller starting annuity and would not necessarily affect the level of contributions but would be simply paid for by having a slightly smaller pension from day one.
“With long-term care insurance, you lose out if you do not need care. But it just seems logical to me that someone would be able to increase the amount of pension income they receive at the point of needing care.”
Gatenby’s comments come ahead of the report from the independent Commisssion on Funding of Care and Support, chaired by Andrew Dilnot, which is due in July.
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