Govt floats AE-style funding approach to social care

The government is considering an "opt-out proposal" modelled on the pensions automatic enrolment system in order to fund social care. Hannah Godfrey finds out more...

The government is considering an “opt-out proposal” modelled on the pensions automatic enrolment system in order to fund social care, the health secretary has revealed.

Speaking to The Telegraph, Matt Hancock, who became health and social care secretary in July, said he wanted to see people taking more “personal responsibility” for their health and social care.

The social care funding proposal would work in a similar way to pensions automatic enrolment – which people must actively opt out of if they do not want to contribute to their retirement pot – and is expected to be outlined in the upcoming green paper on social care, due out soon.

So far, automatic enrolment has been hailed as a success, with one million UK employers having enrolled more than nine million employees into pensions since the policy began to be rolled out in 2012.

Hancock acknowledged major changes would be required to cope with the rising number of elderly people needing care, and to address the injustices of the current system.

“I am attracted to the model of automatic enrolment, which has been so successful in pensions,” Hancock told the paper. “If you make it the norm, tell people what it is they have to do to look after themselves, it is often the case that very few people will opt out.”


Aegon pensions director Steven Cameron said making it the default to contribute in advance towards your own social care had appeal, but was not without its problems.

“With an estimated one-in-four needing care in later life, three-in-four may feel they are paying in without benefiting,” he explained. “Auto-enrolment has also worked to date due to the fact contributions have started at low levels and the amount people will need to pay in is likely to determine the success of a social care equivalent.”

He continued: “While pensions auto-enrolment is a savings plan, the plans for social care may be more of an insurance contract – with everyone’s contributions being pooled to pay for those who need care in future. It is untested if individuals will be happy with this or if significant numbers opt out – perhaps believing they will not need care.”