The age-old problem of old age: nobody wants to think about it, let alone plan for it. This still appears to be the case even though the topic of long-term care has been hotly debated in the press over the past few years.
We know that dealing with the care needs of an increasingly ageing population is one of the most pressing issues this government faces (crippling budget deficit aside...). It has also been made crystal clear that the responsibility of paying for care will lie mostly with the individual.
Yet, according to advisers we spoke to for this week’s cover story (see pages 22-23), people are still burying their heads in the sand when it comes to the cost of care and who will pay for it, despite the best efforts of Andrew Dilnot et al.
But is it up to financial advisers to change peoples’ mindsets? The consensus among our adviser commentators was yes; it is now up to advisers to educate clients and get them talking and thinking about their long-term care needs. Unsurprisingly, people in their 40s and 50s seem reluctant to set aside money for care they may not need. In today’s low growth, low return world, there are more often than not other financial priorities.
However, the numbers speak for themselves: there are currently 9.2 million over 65s in England and Wales and three million over 80s – this number is expected to almost double by 2030.
The likelihood clients will need care is surprisingly high. On average, 20% of men and 35% of women will need some form of social care at some point in their lives, according to Partnership.
Getting clients talking about such a negative topic is not easy. Few people want to discuss the possibility of moving into a residential home. But as the message still doesn’t seem to be getting through, perhaps advisers have no other choice than to make long-term care planning a core part of their proposition.
Elsewhere this week, the Financial Services Authority (FSA) censured Capita Financial Managers (CFM) for its failures in the Arch Cru scandal (see page 5). The FSA’s final notice against CFM lists the failings in many aspects of its oversight. However, the firm avoided a £4m fine because it had contributed to the £54m voluntary payment scheme, and because it would have had to ask its parent company for a hand out.
Meanwhile, the watchdog is said to have delayed its response to the consultation on its planned Arch Cru £110m compensation scheme due to the deluge of responses it garnered. IFAs are likely to face a severe financial punishment for recommending the funds, while Capita won’t take a significant hit.
Advisers, it would seem, will still face the harshest penalty for the disaster.
Deputy editor, PA (Scott Sinclair is away)
Aimed at HNW clients and family groups
Set for 1 April 2019
Letter to pension providers
18 new entrants featured
Recommended cash offer