Advisers believe long-term care should be at the heart of retirement planning following the Budget overhaul of pensions, research for MetLife shows.
Its study among specialist retirement advisers shows 29% believe lack of saving for potential costs of social care in old age is a major threat to the success of the Budget pension reforms due to come into effect in April 2015.
Around 57% of advisers say long-term care funding has to be integrated into retirement planning as part of their new thinking on pensions.
However, they highlighted a need for innovation and new thinking on products - 90% said there is space in the current market for new products designed to help with long-term care planning.
Dominic Grinstead, managing director of MetLife UK, said: "Innovation needs to be encouraged and clients need to be aware of all the options open to them as that will stimulate more innovation. Longevity risk and the potential need for long-term care is part of that."
Dr Ros Altmann, the Government's champion for older workers, was asked by MetLife for a report "Flexibility in Retirement - Planning for change", which recommended:
- using pensions for care;
- allowing tax-free pension withdrawal if the money is earmarked for care;
- introducing an ISA allowance if funds are being used for care;
- launching Family Care Savings Plans;
- providing Workplace Care Savings Plans potentially alongside auto-enrolment.
