Just 7% of consumers would seek IFA advice on care funding
Study reveals IFAs were second least popular choice, ahead of banks but behind Citizens Advice Bureau and local authorities.
Only 7 per cent of consumers aged over 45 would go to their financial advisers for advice on funding long-term care fees, research from care annuity provider Partnership suggests.
According to the inaugural Partnership Care Index, 46 per cent of the 1,023 over-45s questioned would go to the Citizens Advice Bureau and 44 per cent would go to their local council or social worker.
Independent Financial Advisers scored second last in the study, with only seven per cent of respondents saying they would consider visiting an IFA for care advice. Banks were the least popular choice with just four per cent.
According to Partnership, the results are particularly stark because respondents could choose as many or as few options as they liked, depending not so much on who would give the best advice as where respondents would or would not go for advice at all.
Chris Horlick, managing director for care at Partnership, said: “It is a matter of concern that so few would turn to financial advisers for long term care funding advice.
“In 2009, out of the 53,000 self payers who entered residential care only 7,000 received advice from an appropriately qualified financial adviser.
“In the absence of appropriate financial advice self payers – who constitute 41% of all people in residential care - may purchase the wrong financial product to cover the costs of care fees or even not purchase one at all.
“It is hardly surprising that it is estimated that as many as 25% of self funders deplete their funds and fall back on the state.
“This is not only a tragedy for the people involved [but it also] results in considerable expense to the State, as it is estimated that this costs local authorities £1 billion a year in England alone.”
Partnership, which has a specialist annuity product aimed at those going into long-term care, has been active in debates around the future of care funding over the past two years since the Dilnot commission was launched.
Most recently the firm has sponsored an all-party parliamentary local government group, drawn from MPs and peers from all parties, to launch an inquiry into future care provision.
The launch of the inquiry follows the publication of the Dilnot Review in July 2011, which recommended a cap of £35,000 on individuals’ lifetime contributions towards their social care costs.