STRATEGIC REPORT
13
LONG-TERM CARE SOLUTIONS Introduction
L f t m mrgg mre s z ad g o t rt (£m)
Care Plans, or immediate needs annuities, are a segment of purchased life annuities. A Care Plan offers a guaranteed income paid directly to a registered care provider or an individual for the life of the insured, in exchange for an up-front lump sum premium. Under current rules this income is tax free when paid directly to the registered care provider. Care Plans are available to individuals entering care facilities or receiving domiciliary support. As such, Care Plans provide a form of longevity insurance to the individual against the costs of receiving care until their death. Just has a strong pedigree in the market, having been one of the market leaders for 18 years. Two new companies have entered the market in 2019 and whilst their activity has been limited we would expect them to make a greater impact in 2020. Current market and outlook There is a substantial market for care in the UK. The drivers of the need for care are strong because: • there are currently around 1.6 million people aged 85 or over in the UK – this is the average age at which people go into care homes. It is expected that this number will more than double over the next two decades, suggesting a growth rate in excess of 2.7%; • around 33% of women aged 65 and 20% of men aged 65 are likely to enter a care home at some point in the future; and • there is uncertainty over government policy for long-term social care. The government has withdrawn the cap on care fees that was due to become effective in 2020 and planned to publish a Green Paper on care and support for older people by summer 2018, which has been delayed. This will set out how the government proposes to improve care and support for older people and tackle the challenge of an ageing population.
4,000
3,000
2,000
1,000
2011 2012 2013 2014 2015 2016
2017 2018 2019
Lump sum mortgage sales
Existing drawdown mortgages – further advances Source: Equity Release Council New drawdown mortgages – initial advance
N m e o pol (mlin ) a e 65 +
% of UK population over age 65
20 18.3% 18.7% 19.9% 21.7% 23.2% 23.9%
15
10
5
2018
2020
2025
2030
2040
2035
Source: O ce for National Statistics
18 as a leader in UK long-term care
years
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