Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/money/article/a649123
No clarity on pensions and long-term care in coalition review
The coalition government has failed to provide any more detail on its plans for a flat-rate state pension or long-term care fees cap.
by Michelle McGagh on Jan 07, 2013 at 15:53
The coalition government has failed to confirm any detail on the flat-rate pension or what cap will be placed on long-term care costs, in the mid-term review.
The review had been expected to confirm where the cost of long-term care fees would be capped. It was widely rumoured that the government was going to increase the cap to £75,000. This is £25,000 more than the original plan for a cap set out by the Dilnot report into long-term care, which recommended a cap of between £25,000 and £50,000.
However, the government failed to make headway on long-term care reform, following concerns that the coalition had kicked the issue into the long grass because of costs.
The review said ‘we have made it clear that we support [the Dilnot Commission’s] principles’, but failed to give any more details.
Long-term care received just one more mention in the review’s foreword: ‘We will set out two big reforms to provide dignity in old age: an improved state pension that rewards saving, and more help with the costs of long-term care.’
However, the review did not expand on the coalition’s plan for a single-tier, flat-rate state pension. The original flat-rate had been set at £140-a-week but there is no confirmation of the amount in the review.
Instead the review focused its plans to increase the state pension age in line with longevity, believed to be one of the caveats to the introduction of the flat-rate state pension, which will increase the amount paid out to pensioners.
‘We will put in place a new mechanism to ensure that the state pension age reflects future changes in life expectancy so that the state pension system continues to be sustainable and affordable,’ said the review.
The coalition also said it will ‘continue to protect the state pension through the operation of the triple lock guarantee for the duration of this parliament’.
The triple lock guarantee was made by the coalition in 2010 and increases pensions each year by the best of either inflation, the average earnings increase, or 2.5%.
More about this:
More from us
- Impose a death tax to pay for Dilnot care reform, says MP
- Health minister confirms care fees cap will go ahead
- Why we're going to get the state pension later and later
- Cameron is wrong to 'rethink' the £140-a-week state pension
- Government delays introduction of £140-a-week state pension
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
Latest from Investment Basics