An overwhelming majority of over-65s have made no plans in the event that they require long-term care, while more than three-quarters of current retirees and those approaching retirement are unaware of key products specifically designed to pay for care, according to a new study.
According to an annual ‘care index’ by Partnership, which in 2014 polled more than 1,000 adults and 200 advisers, 96 per cent of over 65s have made no plans for care should they need it later in life, and 73 per cent have not spoken to their families or thought about the subject.
In terms of specific products, the study found 77 per cent and 81 per cent respectively of over-65s were unaware of care or immediate needs annuities, which provide regular funding for care from a one-off premium.
In addition, 59 per cent of advisers with the specialist CF8 qualification from the Chartered Insurance Institute to advise on care needs either said they are not ‘familiar’ or ‘very familiar’ with immediate needs annuities, or do not regularly advise on them.
Partnership said that care annuities are the only product specifically designed to meet care costs in return for a one off premium, and are free from income tax if paid directly to a registered care provider.
The company is the largest provider of immediate needs annuities in the UK.
Despite many over-65s being unaware of these products, many were interested in further information about them, the research showed.
One in four wanted to understand more about immediate needs annuities and the same figure expressed an interest in care annuities, while 21 per cent wanted additional information on the deferred payment scheme.
Thomas Kenny, head of technical pricing at Partnership, said: “Care is very much on the agenda at the moment, but this research highlights that not only have most people not made any plans or spoken to their families, they don’t know what their options are when it comes to paying for care.
“This is likely to be due to the fact that very few people want to consider the possibility of needing long-term care in later life.
“However, while there is a very low understanding of the products that can help people manage long-term care costs, some over-65s are clearly interested in understanding more about their options.
“This suggests that advisers should be speaking to their clients to see if they – or their parents – want further information on care planning. Taking time to consider their options now will pay off in the long run.”
ruth.gillbe@ft.com
