With the Government discussing proposals to increase tax amounts for the over 40’s, our Financial Adviser Paul Mason discusses the potential financial impact.
Following the Coronavirus pandemic, a light has been shone on the costs of long-term care and the amount of labour and materials involved in providing safe private residential care post Covid-19, which is likely to become a major drain on resources. The issue of care home funding was already getting attention from central government prior to the Pandemic but is now viewed as a priority.
A team of MPs and policy advisers are currently looking at how to fund the cost of care as it continually rises. Options such as extra tax for the over 40’s or a compulsory insurance payment are now being seriously considered to ease the future burden. Alternative options which are also being discussed include special care ISAs or care pensions.
All of the options under discussion will result in the over 40’s paying more tax than they currently do or having some of their disposable income annexed to provide a pot to fund potential care home fees. This means that the ‘stretched middle’ who are already facing financial pressures such as funding children through university or helping adult children to get on the property ladder could find themselves with less disposable income in addition to the strains of dealing with fears of redundancy raised by the pandemic.
With so much uncertainty and a potential additional cost on the horizon, there has never been a better time than now to review your finances. You may be able to save on the cost of your monthly mortgage payment, obtain additional protection for sickness or loss of income, or simply get on the front foot and take control of your investments and pensions to ensure you are ready for whatever is to come.
To find out more about the options available, or to get in touch with one of our financial advisers, click here.
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