23Jul14 - ILC-UK_SOS 2020_Presentation
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23Jul14 - ILC-UK_SOS 2020_Presentation

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We held an event to launch SOS 2020, supported by Aviva and Ernst and Young. This event was kindly sponsored by the Institute and Faculty of Actuaries (IFoA). ...

We held an event to launch SOS 2020, supported by Aviva and Ernst and Young. This event was kindly sponsored by the Institute and Faculty of Actuaries (IFoA).

Last week the OBR Fiscal Sustainability Report noted that "public finances are likely to come under pressure over the longer term, primarily as the result of an ageing population. Under our definition of unchanged policy, the Government would end up having to spend more as a share of national income on age-related items such as pensions and health care, but the same demographic trends would leave government revenues roughly stable."

But whilst there is greater awareness of the fiscal challenges of ageing, there has been little progress in addressing an overarching plan to address the challenges. ILC-UK is launching SOS 2020 to begin to identify costed solutions to the fiscal challenges of ageing.

The House of Lords Select Committee on Public Service and Demographic Change, in its 2013 report “Ready for Ageing”, began by saying “the UK population is ageing rapidly, but we have concluded that the Government and our society are woefully underprepared.”

SOS 2020 is a major new programme of work led by ILC-UK which will raise awareness of the need to adapt our economy and society to the big strategic challenges posed by an ageing population.

SOS 2020 will outline the specific policy measures needed to achieve this goal. It will illuminate the issues that face us and develop fully considered and costed solutions that will act as a “call to action” to policy-makers and politicians. Above all SOS 2020 aims to raise national and international awareness of problems and possible solutions in which we all have a vested interest.

In an increasingly interdependent world, there is a need to look beyond national shores for arguably collective consensus and joint solutions. SOS 2020 will give us the opportunity to do this.

ILC-UK launched SOS 2020 with specific projects exploring retirement income sustainability and healthcare sustainability.

This launch event gave delegates an opportunity to feed in their thoughts on how to ensure our public policy maximises the opportunities of our ageing society.

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  • This chart shows how care costs can vary significantly by region and it shows the significant care costs pre hitting the cap and post reaching the cap <br /> <br />

23Jul14 - ILC-UK_SOS 2020_Presentation Presentation Transcript

  • 1. Sustainable Older Society 2020 (SOS 2020) Wednesday 23rd July 2014 This event is kindly sponsored by #SOS2020
  • 2. Welcome Baroness Sally Greengross Chief Executive ILC-UK This event is kindly sponsored by #SOS2020
  • 3. Trevor Llanwarne Government Actuary Government Actuary’s Department This event is kindly sponsored by #SOS2020
  • 4. Healthcare Sustainability This event is kindly sponsored by #SOS2020
  • 5. Lawrence Churchill Trustee ILC-UK This event is kindly sponsored by #SOS2020
  • 6. 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)
  • 7. 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”
  • 8. Shaun Crawford Global Insurance Sector Leader Ernst & Young This event is kindly sponsored by #SOS2020
  • 9. Julian Le Grand Chairman, LSE Health and Social Care LSE This event is kindly sponsored by #SOS2020
  • 10. Tom Kenny Partnership, representing the Institute and Faculty of Actuaries This event is kindly sponsored by #SOS2020
  • 11. Sustainable care
  • 12. Caring for an ageing population 12 % of population age 85 and over % of population age 65 and over 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 • 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
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. 5.7 6.1 6.4 5.6 6 4.5 3.9 3.4 4 4.7 9 7 6 9 7 14 18 22 17 13 £0 £50,000 £100,000 £150,000 £200,000 £250,000 £300,000 £350,000 0 5 10 15 20 25 North East North West Yorkshire & the Humber East Midlands West Midlands East of England London South East South West England CareCostsbeforeandafterthecapisreached Personal Funding of Care Costs by Region in England from 2016 Care Home with Nursing - 85 at entry into Care Personal Funding required before the Cap is reached Personal Funding for the remainder of the 10 year period Years before Cap is reached Percentage probability of surviving to when the Cap is reached Probabilty of reaching the cap (%) Years before cap is reached
  • 17. 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?
  • 18. 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
  • 19. Eppu Mikkonen-Jeanneret Head of Policy Helpage International This event is kindly sponsored by #SOS2020
  • 20. Discussion and Q&A This event is kindly sponsored by #SOS2020
  • 21. Retirement Income Sustainability This event is kindly sponsored by #SOS2020
  • 22. Ben Franklin Research Fellow ILC-UK This event is kindly sponsored by #SOS2020
  • 23. 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 0 5 10 15 20 25 30 Health Long-term care State pensions Pensioner benefits Total age-related spending OBR spending projections as % of UK GDP 2018-19 2033-34 2063-64 Source: OBR 2014 Fiscal Sustainability Report PercentofGDP
  • 24. 80 90 100 110 120 130 140 150 160 170 180 1997Q4 1998Q3 1999Q2 2000Q1 2000Q4 2001Q3 2002Q2 2003Q1 2003Q4 2004Q3 2005Q2 2006Q1 2006Q4 2007Q3 2008Q2 2009Q1 2009Q4 2010Q3 2011Q2 2012Q1 2012Q4 2013Q3 2014Q2 2015Q1 2015Q4 2016Q3 2017Q2 2018Q1 2018Q4 Historic Mar-14 Dec-13 Mar-13 Liabilitiestoincomeratio Source: ONS, OBR and author's Debt to income: Actual and projections (various OBR
  • 25. Clive Bolton Managing Director, Retirement Solutions Aviva UK Life This event is kindly sponsored by #SOS2020
  • 26. Mick McAteer This event is kindly sponsored by #SOS2020
  • 27. Jane Vass Head of Public Policy Age UK This event is kindly sponsored by #SOS2020
  • 28. Discussion and Q&A This event is kindly sponsored by #SOS2020
  • 29. Sustainable Older Society 2020 (SOS 2020) Wednesday 23rd July 2014 This event is kindly sponsored by #SOS2020