The government has rejected an amendment to the Care Bill that would have forced local authorities to refer people in need of long-term care to regulated financial advisers.
Instead of being required to refer to regulated advice, councils need only refer people to advice that is independent of the local authority, which would include charities and other organisations.
This move has been condemned by Symponia, the national professional body for care fees planning advisers, which released a statement branding the move as “just plain wrong”
Janet Davies, Symponia’s national joint founder and managing director, said the government’s response was “not surprising”.
She said: “It leaves financial services professionals pondering the question; what’s the point of a signpost if it sends people in completely the wrong direction?
“It takes a government with proper courage to actually make radical and right suggestions. Mr Cameron had a small window of opportunity to do the right thing, but sadly he has fudged it yet again.
“By including financial advice in the Care Bill he could have gone some way to appease those who understand the workings of the care cap and know that most individual self-funders in care will not notice the difference.”
Ms Davies warned that to askew qualified, bespoke financial advice in favour of charities is misguided.
She said: “Yes, of course charities know a about their main subjects – they have an important and valuable part to play. But very few (if any) can actually say - and have PI cover to back it up - ‘I recommend you take this route…’.
“To rebuke the holistic services offered by advisers working within the care fees planning arena just because there may be a charge is insulting. You can’t possibly put a price on safeguarding a lifetime’s worth of accumulated assets.”
Providers such as annuities specialist Partnership have previously argued that referrals to financial advice represented a key element of the long-term care proposals.
Chris Horlick, managing director of care at Partnership (pictured), emphasised that the restrictions applying to the planned personal care cap of £75,000 “emphasises how important it is for people going into care to get appropriate financial advice”.
Under the proposals people only receive help for the personal social care element of their costs, which is typically about a third of the overall amount. Individuals will have to meet all their general living expenses, hotel and personal social care costs before they reach the £75,000 cap.
Mr Horlick said: “Failure to do so [get proper advice] means that they might not purchase the correct financial product to protect them from the substantial costs of care.
“We estimate that someone who lived in a single nursing care room in the South of England would have to spend over £200,000 before they were able to benefit from the cap on personal care set at £75,000.”
