ProtectionJan 3 2017

Care planning moves up advisers' agenda

  • Gain an understanding of the current long-term care landscape
  • Be able to describe recent events in long-term care
  • Grasp how advisers navigate the care sector
  • Gain an understanding of the current long-term care landscape
  • Be able to describe recent events in long-term care
  • Grasp how advisers navigate the care sector
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Approx.30min
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CPD
Approx.30min
Care planning moves up advisers' agenda

According to the Office for National Statistics, the UK population has grown by almost 15 per cent since 1974, with the proportion of state pension-aged citizens to working age people increasing from 30 per cent to 37 per cent.

In the face of this growing - and ageing - population, funding for social care has reached the point of crisis, as former pensions minister Baroness Ros Altmann warned prior to this year’s Autumn Statement.

As with many aspects of social care, the causes for this failure are complex, with culprits ranging from the financial services and property sectors to government at a local and national level. But individual awareness of the problem remains low.

Recognising the problem

Research released last month by Just Retirement Partnership Group, for example, revealed that a mere 6 per cent of over-45 year olds have planned for later-life finances, with just 9 per cent of those saying that they would seek help from an IFA for assistance with care costs.

Stephen Lowe, group communications director at Just Retirement, says: “Not only do we have a rapidly ageing population, with a fifth of people now aged 65 or over, but 77 per cent of over-45s have yet to even think about care, much less plan for it.

“Typically, the annual cost of residential care is in the region of £30,000, which is substantially more than a typical pensioner’s income of £16,848. If a person does need care, they may well struggle to meet these costs, and may need to liquidate assets such as their home, and potentially fall back on state funding.”

Given such a clear disconnect, increasing awareness remains a huge priority. However, with most local authorities falling short on their obligation to make information on care funding options available, the number of accessible resources for those who need long-term care (LTC) funding advice are significantly restricted. 

Mr Lowe adds: “While the first tranche of the Care Act – introduced in April 2015  – standardised the system and put a duty of care on local authorities to provide access to ‘information and advice’ on how to fund care, how this has been interpreted varies.

“Research from Independent Age suggests that just 45 councils out of 152 provided all of the online information required by the legislation, and only 52 per cent of the details provided via phone were deemed to be a good and appropriate response.”

In addition to this problem, and the difficulties of planning for lifestyle changes that have yet to occur and may never do so, there are also few LTC products on offer, as well a very small pool of advisers who specialise in this sector.

Number crunching

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