Research carried out for Just Retirement discovered that nearly two-thirds (63%) of people when faced with the reality of substantial care costs under the new system would be certain or likely to seek professional financial advice to help find ways to pay.
Proposals in the Care Bill now being scrutinised by MPs include the introduction of a cap on care costs of £72,000 from 2016 in England. However, the new funding rules means individuals who can afford to will be expected to bear their own care costs in later life. All but the least wealthy will have to contribute towards care costs and other expenses such as food and accommodation in residential homes. The result is that some will pay out six-figure sums even before the cap takes effect.
The specialist insurer said the YouGov survey of nearly 2,000 British adults shows that when faced with paying significant care costs, more than a quarter (27%) said they would definitely seek professional financial advice and 36% said they would ‘probably’ seek professional financial advice to help with plans to cover the cost. Only 7% said they definitely would not seek professional help.
Stephen Lowe, Just Retirement’s group external affairs and customer insight director, 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.
“Forward-thinking professional intermediaries are already sitting up and taking notice because they can see these reforms and broader demographic trends are likely to generate greater demand for specialist later life financial planning.”
He said that intermediaries actively shaping their business models to seize the opportunities ahead should do what they can to encourage MPs to preferably formalise the role of professional financial advice in the new reforms.
“So far the Government has stuck to its view that you shouldn’t force people to take professional advice,” he said. “But as our own survey shows, people will not just need some support and guidance, but positively welcome it. They want someone to help them understand the options and make intelligent decisions.
“In our view, local authorities should have an obligation to refer people to professional financial advisers in the same way GPs refer patients to specialist consultants. It will undermine the whole system if unqualified helpers are allowed to guide people down the wrong path.”
“This debate is very much alive so we would encourage professional advisers to recognise that ‘the time is now’ to get their voices heard and to shape the future. At the very least we all need to push for sufficient resources to be directed towards information, guidance and advice to support the growing numbers of ‘self funders’ needing to meet their own care costs.”
