Close to two-thirds of people that face ‘substantial’ long-term care costs would seek professional financial advice to help them find ways to cover care fees, according to a new YouGov study commissioned by specialist annuities provider Just Retirement.
The research was carried out among close to 2,000 adults in early December, with 63 per cent faced with the reality of substantial care costs under the new funding system stating they would be certain or likely to seek professional financial advice to help find ways to pay.
Around 37 per cent said they would definitely seek out professional advice, with 27 per cent stating they ‘probably’ would do so. Only 7 per cent stated they would not seek advice.
Stephen Lowe, group external affairs and customer insight director at Just Retirement, said the findings evidenced that care funding reforms going through parliament at the moment will create more demand for specialist financial advice.
He said: “It’s striking that once people become aware that care costs could easily run into the hundreds of thousands of pounds, they quickly recognise the value of some expert know-how.
“This is a key point that we’d like to see accepted and addressed by MPs now finalising the details of the new rules.”
Original drafts of the reforms would have required local authorities to refer self-funders to professional advisers, but this has been replaced with a requirement simply to refer to advice outside of the council itself, including charities and other organisations.
Mr Lowe said: “In our view, local authorities should have an obligation to refer to professional financial advisers in the same way as GPs refer patients to specialist consultants. It will undermine the whole system if unqualified helpers are able to guide people down the wrong path.”
His comments came just after Labour MP Liz Kendall, shadow minister for care and older people, reported to parliament on the plight of older people facing high care funding costs. She said pensioners were facing costs of £150,000 for residential care before they would hit the proposed ‘cap’ on care costs.
Under the proposals going through parliament, from 2016/2017, a care cap will be implemented, which means nobody will have to pay more than £72,000 for their care.
However, according to Labour’s analysis this is “simply not the case”, Ms Kendall said. She pointed out that the average expected council rate for residential care in 2016/17 will be £522 a week. However, the price of a care home bed will be £610 a week - and hundreds of pounds more in many areas.
She said there will also be a cost of £230 a week for ‘hotel and accommodation costs”, which are counted separately to care costs, meaning the real total will be nearer £150,000 than the £72,000 bandied about by the current government.
In a statement, Ms Kendall said: “Families deserve to be told the facts, rather than being conned, so they can properly plan for the future.”