Nigel Peaple: How can employers support staff with later life care costs?

Nigel Peaple PLSA

The care conundrum is not simple and the vast majority of employers may wish to consider later life care costs from two different perspectives.

First, some members of their workforce are likely to need to finance care in later life, well past the age that they are likely to have a close relationship with their employer. The introduction of the pension freedoms means that those with defined contribution (DC) pots can choose to take some, or all, of their savings as a lump sum to pay for care. So arguably the biggest support that employers can provide to help staff with later life care costs is to ensure that they take advantage of automatic-enrolment by joining their workplace pension scheme and contributing the maximum amount. Taking these steps mean they would benefit from employer contributions as well as tax relief. In addition, if they did not need to pay for care, they could use it to improve their standard of living in retirement or make their property more accessible so they can stay in their home well into old age.

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It is also entirely possible, if not probable, that employers will have employees who are currently supporting older relatives who need care. This might mean financial, emotional or practical support or a combination of all three. Employers could consider factoring this into their planning and ensure that, wherever possible, these employees have the flexibility and understanding to deal with what is likely to be a very difficult time. This will also help them in the long term because if they have to give up work to become a full-time carer, it can have a major impact on their own later life finances.

Nigel Peaple is deputy director, defined contribution (DC), lifetime savings and research at the Pensions and Lifetime Savings Association (PLSA)