The ABI and Department of Health are working together to help grow the LTC market. The need is there, but when is the right time to start talking to clients about care costs?
Having a conversation with a financial adviser about how to fund long-term care (LTC) in later life is probably not high up on clients' priority lists when they have just retired.
Let's be honest, they are probably looking forward to setting sail on that once-in-a-lifetime cruise or spending some quality time with the grandchildren. Thinking about how they will pay their care home costs may not that palatable.
Two Benjamin Franklin quotes come to mind. First: "In this world nothing can be said to be certain, except death and taxes," followed neatly by: "If you fail to plan, you are planning to fail".
It really is time to tackle the difficult subject of care fees head-on and treat it like any other financial eventuality
Life expectancy in Franklin's time was nowhere near what it is today, so while LTC was more than likely not what he was pointing to, old age is inevitable for most of us. Clients might as well be prepared for it.
IFA firm Cockburn Lucas and LTC advice body Symponia are working together to get advisers talking LTC to clients in their 60s, when they are still relatively young and in good health.
Cockburn Lucas LTC specialist Alistair Fraser thinks care funding planning should be dealt with alongside all other aspects of financial planning – proactively and in advance.
He said: "It really is time to tackle the difficult subject of care fees head-on and treat it like any other financial eventuality. Putting firm plans in place now will ensure that people stay in control of their own care destiny, even if their physical health and mental capabilities are reduced when the time comes.
"To do this, seeking qualified advice must be the absolute first port of call – no one should attempt to go it alone. Even the Government agrees and actively promotes this philosophy on its Money Advice Service website."
Fraser added that society needed to "throw away the rule book and start again" when it comes to way property is viewed.
He explained: "It is time people regarded their homes as just another form of currency – and one that can have a very powerful influence over an individual's choice of care; where, when and how it is delivered.
"And yes, care fees may seem expensive and may seem unsurmountable to many. But with pre-planning, a better care future is within many people's grasps, so we say; aim to purchase the care you want, not the care you think you can afford."
What Dilnot did...
Last year, Andrew Dilnot's proposed care cap was written into the Care Bill. It had been hoped the cap would bring certainty to LTC, but many were left disappointed by the final proposals. The £72,000 cap relates only to care costs – not accommodation, food and other 'hotel-style' services necessary to live. It is thought the majority of self-funders will remain in that position even after their care cap has been used.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation