Incentive needed for long term care saving, Partnership says
LTC specialist moots raising means-testing cap for those saving for future potential funding needs
People should be encouraged to save for their long term care needs with an incentive from the government, a specialist provider has said.
Chris Horlick, managing director of care at Partnership, said people are unlikely to think about funding for future care needs unless there is some benefit for them.
“I think there probably needs to be some incentive to do the right thing,” he said.
At present, people are liable for all of their care costs if they have assets worth more than £23,250 and some of their costs on a means-tested basis if they have more than £14,250.
Horlick said the government should consider raising the threshold in line with the amount people have saved towards their care costs in specific long term care vehicles.
For example, if somebody saved £30,000 towards their care costs, the threshold above which they should pay all of their care fees should be raised to £53,250.
When asked if he had put the idea to the government, Horlick said: “It is fair to say that the Department of Health and the Treasury and a number of interested parties have seen it.”
He said something needed to be done to grow the long term care market and that the Dilnot report, published in July 2011, has not done anything to substantially stimulate the market.
There are only two providers in the market at the moment, Friends Life and Partnership, both providing long term care annuities rather than using a pre-funded insurance model.
David Finan, managing director of Jardine Finan Wealth Managers, said the problem lies with clients’ views on care funding.
“Pre-funding was never popular when it was available,” he said. “The problem is the majority of people don’t want to fund for that kind of need. No one believes they will need it and they simply can’t afford it.”