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Will I have to sell the family silver? Funding care in retirement

CII Thinkpiece no.111

Describes some of the financial realities of funding social care in retirement, despite the assurances set out in the Care Act 2014, and underscores the importance of receiving financial advice.

  • While improvements in longevity in an ageing society are to be welcomed, funding long-term care has become a key public policy issue. With regional variations in care leaving many to fund most of their costs, the need for financial advice is increasingly important.
  • The Care Act represents a significant change in adult social care in England, establishing a cap on the lifetime individual contributions to social care at £72,000, and implementing a recommendation from the Law Commission for local authorities to help self funders get access to independent financial advice. It has been a long journey to get the importance of financial advice truly recognised as a key part of planning.
  • Research from the Local Government Information Unit (LGiU) in 2012 found that 24% of self-funders depleted their funds prematurely and fell back on state funding. This can have a huge personal impact on both the individual in care, who may have to move to cheaper accommodation, and the local authority which will have to pick up the bill.
  • Financial advice should be given by a financial adviser who has a speciality in long-term care and related issues, such as that covered in the Chartered Insurance Institute's CF8 Long-Term Care insurance qualification.
  • However with the Care Act proposals and accompanying statutory guidance and regulations set to ensure that more funders are made aware of, and where appropriate 'nudged', towards regulated financial advice, there will be a growing demand for independent financial advice.

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