Commenting on the announcement of a Green Paper on social care funding, Steve Webb, policy director at Royal London, said: “A Green Paper will simply prolong the decades of dithering on how to fund social care. We have had twenty years of reviews and commissions. What was needed was political courage to implement a system which protects all families from potentially huge care costs and stimulates a market in care insurance for those who want greater security. The Government should commit now to implement the Dilnot proposals without further delay”.
Note: Previous major reports on long-term care funding include:
• March 1999: “Royal Commission on long-term care for the elderly”
• March 2006: Wanless review: “Securing good care for older people”
• July 2011: Dilnot Commission: “Commission on Funding of Care and Support”
Adrian Boulding, Director of Policy at NOW: Pensions commented: “The Chancellor’s announcement today has catapulted the self-employed in the spotlight and, with the increase in national insurance, we believe now is also the time to include self-employed in auto enrolment. Auto enrolment has been a great success, but the 5 million self-employed in the UK are excluded. With the auto enrolment review taking place this year, the government has an opportunity here to ensure that the self-employed, as well as employees, are able to look forward to adequate income in retirement.”
Steven Cameron, Pensions Director, Aegon UK comments: “The introduction of higher NI rates for the self-employed will not be welcomed by this group but were perhaps to be expected. This is because there is an increasing division between employees and the self-employed with the latter paying rates around 3% lower than those of employees. NI contributions notionally pay for state pensions and with the self-employed being key beneficiaries by now receiving the same single state pension as employees, it’s not unreasonable to reflect that in NI rates. However, this justification would have been easier to use had the changes to NI happened at the same time as changes to state pension entitlements.
“In addition, employees receive other benefits such as statutory maternity and sick pay from the NI system which the self-employed and those in the gig economy don’t qualify for.
“Looking wider, more needs to be done to close disparities inherent in the current gig economy, and between the employed and the self-employed. Within pensions, we need to find a solution equivalent to auto-enrolment for the self-employed to halt the growing retirement income divide we’ll otherwise face between them and their employed peers when they come to retire. One way forward to soften the blow would be to ‘rebate’ part of the increase in NI into a private funded pension of the self-employed individual’s choice, along the lines of auto-enrolment for employees.”
Please find attached some initial comments from Stephen Brown, Partner at Mazars, regarding Budget announcements so far.
• Increased personal tax for self employed, not insurance specific but which will hit some insurance brokers personally.
• Increased personal tax by reducing dividend allowance from £5k to £2k, not insurance specific but again will hit the pockets of those small insurers and brokers or start-ups who were relying on taking dividends out.
• Hammond talked about R&D and making it less of an admin burden to make a claim - no details yet. Again not insurance specific but the insurance industry is investing heavily in tech currently so could be a plus depending on the detail.
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