The Government should follow-up on its ‘Pension Freedoms’ project with a similar ‘Care Freedoms’ proposition designed to help people secure the care they need in later life and to deliver quality funding outcomes.
That was the view of the Later Life Academy’s (LLA) Stuart Wilson who was speaking at a debate on ‘Tackling Care & Capacity with Housing Wealth’ at today’s FSE Midlands event, the premier exhibition for the financial services industry, which is taking place at the Ricoh Arena in Coventry.
Wilson said the ‘Pension Freedoms’ project had been announced by the Government with little consultation and it had been left to the industry to deliver, however there was scope for ‘Care Freedoms’ in order to fill the huge gap that exists for individuals around how they find and pay for their care.
“The Government should definitely consider ‘Care Freedoms’,” said Wilson. “And as part of that they should also look at the tax breaks that could be offered. For example, if there is a payment made directly to a care provider from an individual’s pension, then why shouldn’t the tax be taken off this?”
Wilson said the Government needed to engage with the private sector around how people who could afford to pay for their own care, might do so, and the methods they could use such as equity release.
“The problem we have at the moment is that people are using their housing wealth to pay for their care but its being done because Local Authorities are compelling them to do it,” he added. “We need to give them much more choice about the options they can secure and how they might pay for it. It shouldn’t just be about having to accept what the Local Authority tell them they can have.”
Others on the panel agreed that the sign-posting of consumers to care options was still short of what it should be. “I have gone through the process myself with my mum, who is 91 years old,” said Gary Webster of Equity Release Supermarket, “ and I can tell you there is no sign-posting.
Webster also said that while the current suite of later life lending products fitted well with funding social, domiciliary care they didn’t fit as well with long-term care provision.
“For example,” said Webster, “lenders won’t allow the property to be let out where the borrower goes into care. This is a gap which could be filled by more lenders – currently we have Canada Life who allow the consumer to let out the property if the borrower is going into long-term care but that doesn’t come with the Equity Release Council Safeguards.”
Wilson argued that there was a huge education piece to be completed to ensure consumers fully understood where to go to get quality advice and find the advisers who were well-versed in delivering the right solutions. “Government guidance now says that housing wealth has to be considered in the round, which is a real positive,” he said. “But we need to have a joined-up process. Ultimately we have to make people more aware of what the options are.”
Rakesh Sharma of Promedica24 called on lenders to improve their product offerings. “Lenders could do a lot more,” he said. “We could produce bespoke products for this. I like the fact, for example, that customers can pay interest, plus people want to live in their own homes and they want to have choices.”