This document summarizes a conference on creating a sustainable older society in the UK by 2020. It discusses challenges of an aging population such as increasing numbers of older people needing care and people with dementia. Presenters addressed issues like healthcare sustainability, social care funding reforms, and the need for greater individual savings and retirement planning. Data showed the percentage of GDP spent on health, pensions and social care will rise significantly. The conference highlighted the need for stable social care policies, improved financial advice, and policy changes to support new retirement funding products that could help cover long-term care costs.

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
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#SOS2020

3. Trevor Llanwarne
Government Actuary
Government Actuary’s Department
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#SOS2020

4. Healthcare Sustainability
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#SOS2020

5. Lawrence Churchill
Trustee
ILC-UK
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#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
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#SOS2020

9. Julian Le Grand
Chairman, LSE Health and Social Care
LSE
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#SOS2020

10. Tom Kenny
Partnership, representing the Institute and Faculty of
Actuaries
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#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
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#SOS2020

20. Discussion and Q&A
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#SOS2020

21. Retirement Income Sustainability
This event is kindly sponsored by
#SOS2020

22. Ben Franklin
Research Fellow
ILC-UK
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#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
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#SOS2020

27. Jane Vass
Head of Public Policy
Age UK
This event is kindly sponsored by
#SOS2020

28. Discussion and Q&A
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#SOS2020

29. Sustainable Older Society 2020
(SOS 2020)
Wednesday 23rd July 2014
This event is kindly sponsored by
#SOS2020