Jon Hatchett, Partner at Hymans Robertson comments on the proposal to introduce automatic enrolment for social care costs:

“A sustainable long-term funding strategy to underpin social care is desperately needed. The system is on its knees and under unsustainable strain and anything that increases the funding for this vitally important sector should be welcomed. If most people realised the scale of the crisis we have in social care, they would be shocked.

“Introducing an auto-enrolment for social care could progressively increase the proportion of people pooling the risk of care costs and ultimately reduce the future call on the state. While this is a great step in the right direction, it won’t address the current funding crisis.

“To be effective, auto-enrolment will have to be implemented alongside the long awaited Government cap on care costs.  For it to work best, it will also need a vibrant private insurance market which would use the saved funds to spread the risk between people.  Together this trio of solutions will make a difference, more private saving, insurance to spread risks to an affordable level for most and a Government cap to underwrite the catastrophic costs faced by the unfortunate few.

“The introduction of auto-enrolment in saving for retirement was staged over many years. While it’s been a huge success, many people still aren’t saving enough. The current rates of contributions, even with the planned increases, are still not enough to secure an adequate retirement income for most.

“For social care, as with pensions, a balance would need to be struck between ensuring the contribution levels are not so high people would decide to opt out and not so low it doesn’t make a meaningful difference to funding.  

“While this could indeed be the answer for the long term, we still, in the meantime, need some large sticking plasters to deal with the very immediate and pressing needs of many in our society.”