Personal Pension  

Older clients need advice under the Care Act 2014

Local authorities will have to signpost people to financial advice, which makes long-term care planning essential, the director of the Society of Later Life Advisers has said.

Speaking at the Personal Finance Society conference in Birmingham, Tish Hanifan, founder and joint chairman of the Society of Later Life Advisers, said: “Advisers need to engage more fully with clients in planning for care costs.”

In her keynote speech, Ms Hanifan looked at the implications of the Care Act 2014, which provides a new legal framework for the delivery of care.

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She said that local authorities now have an obligation to bring in local information advice. The government decided to include local authorities, which, according to the Act, should actively help and direct a person to an FCA-regulated, accredited financial adviser and ensure it is on a transparent basis.

The legislation, which received Royal Assent on 14 May 2014, introduced changes to the care assessment and funding system, national eligibility criteria, charging procedures, ‘hotel’ costs, the care cap and deferred payment schemes.

The deferred payment scheme comes into effect in April 2015.

She said: “When they talk about it being universal, it is not. Not all local authorities offer it but legislation dictates that they will have to offer them.”

Ms Hanifan said the average cost of care today is £38,000 a year – £732 a week.

The contribution of local authorities is limited by eligibility criteria, standard rate and hotel costs.

She said: “It is important for advisers to help clients to look beyond the headlines. There are worked examples of figures in your own area that will help to focus attention on the reality of the cost of care, and deferred payments will now include interest on the loan.”

Adviser View

Janet Davies, co-founder of long-term care advisory network Symponia, said: “Not only will the Care Act see the biggest shake-up of the way Adult Social Care is approached and delivered, but also the positive outcome for the already long-term care faithful is hugely encouraging.

“Symponia has long held the view that every self-funding resident deserves and should seek qualified long-term care financial advice. So if more people will be encouraged to do so, this is is a rewarding proposition – bring it on.

“Only when care fees planning is allowed to leave the shadows and become an integral part of the far more mainstream later-life subjects, such as pensions and inheritance tax, can we start to celebrate the news that all clients are being served properly.”