With two-thirds saying they find the Government’s Announcement on Care Funding Confusing
Partnership’s Third Care Index reveals that with less than a year to go before the Care Bill starts to be introduced, 61% of over-45s admit they find the subject confusing and the largest proportion (49%) would turn to local authorities/social workers for guidance on this topic [Click here for full report].
Others would turn to the Citizens Advice Bureau (43%), use the internet (36%), speak to their family (33%), consult their doctor (31%) or look for help from a charity (21%). Just 13% would speak to a financial adviser (up from 8% in 2012) who are arguably the only people qualified to provide advice on financial products which can fund care
With councils often the first port of call for information, 96% of over-45s said they expected them to provide clear information on their care options as well as guidance on their benefit entitlements. In addition, 96% said they would value ideas on local services which offered alternatives to residential care and 94% would expect information on local care homes as standard.
Over half (52%) also felt that referral to an independent financial adviser who could help them to structure their finances would be valuable. However, CF8 qualified advisers (i.e. those who have passed the CII exam to provide advice on care funding) estimate that just 28% of councils are referring people to advisers and only 44% of care homes are providing this service to their residents.
When asked what they would do following this referral, 40% of people said they would arrange a face to face meeting, 19% would speak to them over the phone and 24% said that it would prompt them to speak to their own adviser.
With consumers consistently underestimating the annual cost of care (anticipated – £27,203 vs. actual £28,600) and many still looking to the State for assistance, knowledge around care funding products is low. Currently, 82% have not heard of an immediate needs annuity the only financial product specifically designed to fund care, 53% are not aware of long-term savings bonds and 24% say that they do not know what equity release is.
Thomas Kenny, Head of Technical Pricing at Partnership comments:
“Almost three-quarters (72%) of people do not believe that they will need care during their lifetime so it is not surprising that they don’t know much about the products, have not spoken to their families and find the entire topic confusing. However, the fact remains that one in three women and one in four men who reach 65 will need care and they are likely to turn to their local council for help as some point.
“The typical care home costs £28,600 each year which is significantly above many over-65s’ annual income and a burden that they need qualified independent help to manage or they risk falling back on state support. Therefore, building these ties with specialist independent financial advisers is in the interest of councils as they prepare to work within the new framework of the Care Act.”