A new pension care fund could help people save for long-term care, the Institute and Faculty of Actuaries (IFoA) has suggested.
The IFoA said the fund would be a ring-fenced long-term care savings pot that would sit within the framework of a defined contribution pension scheme.
It suggested the savings would be treated for tax purposes like a pension and any money accumulated that was not used to fund care could be passed on free of inheritance tax for use as a long-term care fund by a spouse or other beneficiary.
A report by the IfoA found that the new social care cap that is being introduced in 2016 would not offset or replace savings as a key means of funding care.
Thomas Kenny, one of the authors of the IfoA’s report, said: ‘Second to property, pensions are the largest wealth asset for most people.
‘Pensions are largely understood, there is an existing savings framework for them and, with the right tax incentives and flexibility, there are products that could help people to meet any care needs they may have in the future.’
