"Given the sums of money and complexity involved, professional advisers have every reason to see themselves as a key part of the solution."
Partnership's research found that while 44% of people thought it should be standard policy for councils to refer people to financial advisers, 56% thought such referrals would be helpful, up from 51% last year.
Only 16% of people believe the state will pick up their care costs, a proportion that has fallen every year since 2012 (51%). In addition, for the first time since 2012, people overestimated the average cost of residential care at £30,830 a year, £334 higher than industry figures suggest.
Despite nearly four in 10 (38%) over-45s saying they had some experience of looking into care for friends and family, this does not appear to have encouraged them to act when it comes to planning for their own potential care needs. Only a small minority (6%) have included the cost of care in their financial planning, although that number rises to 18% for the over-75s.
Financial intermediaries are also low down the pecking order when it comes to what sources of information people said they would use when seeking advice about care funding. The top sources were Age UK (50%), local authorities (26%), Citizens Advice (24%) and family and friends (18%). Financial advisers came in at 9%.
Yet, when asked about how they would feel if they were referred to an IFA by the council, 37% said they would be grateful for the information and would arrange to meet and a further 22% agreeing they would be grateful and would talk by phone or email. 12% said they would contact their own adviser. Only one in 10 said they wouldn’t follow up the referral.
The level of understanding around products that can be used to pay for care is also relatively low. Most (62%) have heard of equity release but 40% of over-45s said they were not interested in learning more about it.
Only a minority had heard about care annuities (16%) and immediate needs insurance (12%). Only 23% said it was true that financial products exist that can pay care fees for as long as they needed. And only 19% knew of deferred payment schemes, 20% said they intend to sell their home to meet care costs, while 6% will rent out their homes.
Stephen Lowe, group communications director at Just Retirement, said: “This will ultimately pay dividends in the future if we find that more people are considering how to meet care costs and are using trusted sources of information and advice to make smart, sustainable choices. Given the sums of money and complexity involved, professional advisers have every reason to see themselves as a key part of the solution.
“Left alone, most people won’t take formal financial advice but they seem to be open to being ‘nudged’ in that direction. It may help save some of the estimated £425 million a year of extra cost to taxpayers due to self-funders running out of money to pay care bills.
“Regular news coverage of a care crisis is making people generally aware that big problems exist but lack of detailed knowledge of important rules such as means-testing limits or whether they will need to sell their home is leaving them in limbo when it comes to planning or taking action.”
