Could an NHS for social care change financial advice?

I first wrote about proposals for a National Care Service back in 2010, so there is a certain sense of déjà vu about this debate.

Sixteen years later, advisers would still ask many of the same questions. What exactly would be free? Would accommodation costs be included? Who would qualify and, perhaps most importantly, how would it be funded?

From a financial planning perspective, a properly defined national system could provide something extremely valuable: certainty. At present, clients can have little idea whether their eventual care costs will be negligible or run into hundreds of thousands of pounds.

Greater certainty could give people more confidence to spend or gift money during retirement rather than retaining capital against an unknown future liability.

But until we know exactly what is covered, who pays and when it might actually happen, advisers and their clients still need to plan around the system we have today.

A National Care Service is a "more government" mistake. Social care already costs 2.6% of GDP, with demographics pushing it up alongside pensions and healthcare. Today, people fund their own care until savings run dry, then means-tested council support steps in. Make it free at the point of use and demand surges, as marginal cases now managed by family or independent living pile in. Worse, a state monopsony would politicise pay and key decisions, handing unions leverage and the state a firmer grip on our lives. For advisers, it changes everything as they currently guide clients through means-testing and shield assets from ruinous care bills. Under a state model, clarity on the tax mechanism, personal care versus accommodation, transitional rules and private top-ups are required. Clients gain predictable costs, easier retirement modelling and no forced home sales. Immediate Needs Annuities would wither. But expect higher taxes, income, property or capital gains to pay for it.