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UK's Sunak wants insurers to explore products for social care costs

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By Reuters
UK's Sunak wants insurers to help with social care costs -FT
UK's Sunak wants insurers to help with social care costs -FT   -   Copyright  Thomson Reuters 2021
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By Aishwarya Nair and Vishal Vivek

-British finance minister Rishi Sunak has directed Treasury officials to explore with the insurance industry new financial products that would help people cover their share of costs for social care, a Treasury source said on Friday.

Prime Minister Boris Johnson set out plans on Tuesday to raise taxes on workers, employers and some investors to try to fix a health and social care funding crisis. With that, the government said that no one would have to pay more than 86,000 pounds towards the cost of their care over their lifetime.

The state will step in if the costs rise over that amount. Social care refers to long-term health care outside hospitals.

Sunak has asked officials to work with insurers to consider “new products” that can help with social care costs, the treasury source said.

“We’re hopeful that in time the cap on costs will provide the clarity insurers need to create new products,” the source said.

The Financial Times, which first reported the news, said that if insurance was available to cover expenses up to 86,000 pounds, it would help Johnson claim he was honouring the 2019 Conservative party manifesto pledge that “nobody needing care should be forced to sell their home to pay for it.”

Johnson’s move to raise taxes broke a promise made in that manifesto to not raise such levies to fund social care.

A poll on Friday showed that support for Johnson’s Conservative Party has slipped behind the opposition Labour Party to its lowest level since the 2019 national election, after announcing the tax rise.

($1 = 0.7230 pounds)