Burnham sets out plan to reform triple lock to pay for social care

Charlotte Kennedy, chartered financial planner at Rathbones, said: “The announcement highlights one of the biggest retirement challenges facing the UK: how to balance the cost of supporting an ageing population with the need to provide pension security for future retirees.

“Few would dispute the need for social care reform, but many savers will be asking what this means for the future value of the State Pension. For future generations, the expectation is increasingly that individuals will need to take greater responsibility for funding both retirement and later-life care themselves.

“That uncertainty is already evident. Our research found that 49 per cent of affluent UK adults say uncertainty around pension policy makes them anxious and leaves them needing additional support when making financial decisions, while 58 per cent rank changes to tax rules affecting their retirement income among their leading retirement concerns.

“The focus on social care is particularly significant. While care provision is becoming a bigger policy priority, many people still aren’t planning for it financially.

“Our research found that 40 per cent of affluent UK adults rank the cost of long-term or residential care among their top three retirement concerns, yet 45 per cent have not factored potential care costs into their retirement planning at all.

“This points to a significant planning gap. People often focus on building enough wealth to stop working, but retirement planning should also consider what happens if health deteriorates or care is needed later in life. The risk is that people are planning for retirement, but not necessarily planning for later life.”