In response to The Dilnot Report, July 2011, which recommended a cap on individual care fee funding of £35,000 for individuals with assets of more than £100,000, the White Paper sets out the ambition to promote people’s wellbeing and independence and to create a developed care services “market place” over the next ten years.
It outlines the timetable of milestones toward this goal, which continues to April 2015, yet leaves the “£35,000 cap” discussion needing further consultation and this has left everyone without a clear idea of how much care cost to plan for, either now or in the future.
This lack of certainty will do nothing to stimulate demand for care funding products.
So product providers to the long term care insurance market are left having to develop flexible and innovative new products in the absence of clear rules, which will address the current as well as the future market place for care funding. Yet this will be a challenge since without demand, there will be little point in providing supply. The absence of a clear framework is counter productive.
The later life advice market place has its own set of challenges. With the prospect of uncertain care costs, the financial adviser must help the client make the best use of savings and capital, even in the absence of appropriate pre-funded financial products. One thing is clear – an informed discussion between client and adviser at an early enough stage can enable better cash flow planning and cost mitigation.
The above forms part of an article appearing in Cover Magazine (which deals with health insurance, protection and related areas) on 13 August 2012 and was authored by Neil A Sewell. To read the full article you can visit www.covermagazine.co.uk and search “SewellBrydenGunn Dilnot”.
The White Paper referred to in this article was published by HM Government in July 2012. Last week, the Prime Minister was headlined as intending to implement the proposed funding cap on Long Term Care costs – however this would not be before the 2015 general election. Until then the current challenges to funding long term care remain the same, namely that people will remain vulnerable to having to use their homes and deplete their estates to fund costs and means testing by Local Authorities will continue to pose a threat to many families.
This emphasises more than ever the real need to seek and take professional specialist financial planning advice at an early stage. The effect of having to deal with care cost funding continues to be underestimated.
If you need advice about funding care costs or planning for this, or just want to have an initial chat about it all, please do not hesitate to get in touch with us. (Tel: 01276 471083)
Neil A Sewell is a Chartered Financial Planner specialising in advising clients on creating, protecting and ultimately enjoying their wealth using SBG’s own unique SmartLifestyle™ Financial Planning process and disciplines. Particular areas of specialism include helping clients invest and use their hard won money wisely – always with the end goal in mind -based on a full and proper assessment of their situation and needs – Lump Sum Investments (care fees funding, windfalls, royalties, inheritances, business sale, injury and other claim settlements, divorce settlements, redundancy awards, risk based re investment etc), Pensions and Retirement, Equity Release, Long Term Care funding, Estate and Lifestyle Financial Planning.