23Jul14 - ILC-UK_SOS 2020_Presentation
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Transcript of 23Jul14 - ILC-UK_SOS 2020_Presentation
Sustainable Older Society 2020 (SOS 2020)
Wednesday 23rd July 2014
This event is kindly sponsored by
#SOS2020
Welcome
Baroness Sally GreengrossChief Executive
ILC-UK
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#SOS2020
Trevor LlanwarneGovernment Actuary
Government Actuary’s Department
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#SOS2020
Healthcare Sustainability
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#SOS2020
Lawrence ChurchillTrustee ILC-UK
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#SOS2020
Indicative Statistics Present/ C.2050 %
Recent past Increase
• World % of over 60’s 10% 20% 100%
• Older people needing care 101m 277m 174%
• People with dementia 44m 135m 207%
• % of UK GDP (Health, Pensions, 13% 19% 46%Social care)
Potential Vision• “A (global) society, which maximises good health
throughout the life course, which has mastered preventable diseases & where health care systems
– Are efficient– Publicise outcomes– Are accessible to all citizens at all times– Minimise rationing– Have tariffs for usage which command wide
support – Continue to evolve to changing demands”
Shaun CrawfordGlobal Insurance Sector Leader
Ernst & Young
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#SOS2020
Julian Le GrandChairman, LSE Health and Social Care
LSE
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#SOS2020
Tom KennyPartnership, representing the Institute and Faculty of
Actuaries
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#SOS2020
Sustainable care
Caring for an ageing population
12
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
% of popula-tion age 85 and over
% of popula-tion age 65 and over
• UK number aged 65+ is expected to increase by more than 50% in the next 20 years
• Aged 85+ expected to more than double in the same period
• Wide variations in life expectancies and probability of needing care between males and females
• Variation by geographical region in life expectancy and morbidity
• Incidences of dementia (moderate or severe cognitive impairment) are rising
Background to social care changes
• Background to social care changes– Timeline – Care Act - Consultation
– Cap
– Different costs (hotel, LA rate, top-up)
– New means test limits – (£17k to 27k/118k)
– Other changes
• Recent budget announcement– Facilitate product innovation
– Concern of pension funds being exhausted before needing LTC
What is sustainable care?
• Sustainable = greater self funding?
• Greater self funding can be achieved by – Increasing awareness of
• long term care costs
• longevity risk at retirement
• financial options for providing an income in retirement including meeting care costs
– Product innovation
– Tax incentives to encourage saving
So
cial
car
e
Summary of findings from IFoA paper
• Need greater saving into pensions
• Pensions Bill
• Significant proportion of retirees will need LTC
• Most people who need LTC will not benefit from the cap
• Benefit of cap and personal costs vary significantly by region
• Range of pension products that could support LTC
• Communication
• Regulatory and tax changes
North Ea
st
North W
est
Yorks
hire &
the H
umber
East
Midlands
West
Midlan
ds
East
of Engla
nd
London
South Ea
st
South W
est
Engla
nd0
5
10
15
20
25
£0
£50,000
£100,000
£150,000
£200,000
£250,000
£300,000
£350,000
5.7 6.1 6.4 5.6 6
4.53.9
3.44
4.7
9
7 6
9
7
14
18
22
17
13
Personal Funding of Care Costs by Region in England from 2016Care Home with Nursing - 85 at entry into Care
Personal Funding required before the Cap is reachedPersonal Funding for the remainder of the 10 year period Years before Cap is reachedPercentage probability of surviving to when the Cap is reached
Care
Cos
ts b
efor
e an
d aft
er th
e ca
p is
reac
hed
Probabilty of reaching the cap
(%)
Years before cap is reached
What do we need to know?
• We need greater sharing of social care cost data by local authorities
• We need to understand how technology will impact care
• We need to understand how medical advances will affect the ageing society
• We need to know how local authority rates will change under the new regime – will the gap between LA rates and care costs reduce? How will top-up of care costs affect this?
What do we need to do?
• Stable social care regime to provide foundation for greater product development
• Create an effective information and advice process to encourage greater saving and informed pensions decisions at retirement
• Technical changes to support product development
Eppu Mikkonen-JeanneretHead of Policy
Helpage International
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#SOS2020
Discussion and Q&A
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#SOS2020
Retirement Income Sustainability
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#SOS2020
Ben FranklinResearch Fellow
ILC-UK
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#SOS2020
Health Long-term care State pensions Pensioner benefits Total age-related spending0
5
10
15
20
25
30
6.4
1.2
5.5
0.8
20.4
7.5
1.7
6.7
0.9
23.0
8.5
2.3
7.9
0.9
25.1
OBR spending projections as % of UK GDP
2018-19 2033-34 2063-64
Source: OBR 2014 Fiscal Sustainability Report
Per
cent
of
GD
P
80
90
100
110
120
130
140
150
160
170
180
HistoricMar-14Dec-13Mar-13L
iabi
litie
s to
inco
me
ratio
Source: ONS, OBR and author's calcula-tions
Debt to income: Actual and projections (various OBR forecasts)
Clive BoltonManaging Director, Retirement Solutions
Aviva UK Life
This event is kindly sponsored by
#SOS2020
Mick McAteer
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#SOS2020
Jane VassHead of Public Policy
Age UK
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#SOS2020
Discussion and Q&A
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#SOS2020
Sustainable Older Society 2020 (SOS 2020)
Wednesday 23rd July 2014
This event is kindly sponsored by
#SOS2020