MetLife is calling on the Government to allow people to use their pension fund to pay for nursing care under plans linking pensions and long-term care.
Its proposals would open up flexible drawdown to people who do not meet the Treasury’s minimum pension income requirement. Head of product marketing Peter Carter says the firm is looking at the practicalities of allowing people to access their entire defined-contribution pension pot to pay for nursing care.
He says: “Accessing pension funds would allow billions of pounds to be spent on care and could particularly be used by people who have got quite severe impairments. The average stay in long-term care is about four years, so there are circumstances when you could release more money from pensions outside the restrictions of flexible drawdown. This could assist people with reasonable-sized DC pots quite considerably.”
Carter says widening pension access could be restricted to people who require nursing care, with the state picking up any “tail” costs if a person outlives their pension.
He says: “For people with pension pots of, say, £150,000, the cost of long-term care could be funded for four or five years, with the tail risk funded by the Government.”
Informed Choice managing director Martin Bamford says: “This seems like a sensible idea. I hope the Government can make some decisions because there has been a lot of talk about long-term care without any solutions.”