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80% ‘have no idea’ about long-term care costs

Report urges increased awareness and better advice

Nearly eight out of ten people have no idea how much they will have to pay for care in old age.  

The Chartered Insurance Institute (CII) hails the Dilnot Report as a ‘good start’ but calls for qualified advisers to raise public awareness and build consumer trust. 

Public knowledge limited 

The Chartered Insurance Institute’s new report, Who Cares?, examines the current state of awareness about the cost of care and how far people are expected to pay for this

Commenting on its findings, David Thomson, CII director of policy and public affairs, said: ‘There is clearly a massive disconnect between public perception and reality. 80% of the public have no idea of how much their long-term care will cost and consequently are unlikely to be making any provision to meet that cost. 

‘Even more worrying is that 50% of the public think long-term care is entirely free at the point of use. The reality is starkly different.’

Dilnot recommendations engender concensus   

The report welcomes recommendations made by the Dilnot Commisison, which the government is currently considering. It identifies the most notable of these as proposals to cap the total amount that individuals will have to spend on care and to increase the amount at which people can get support from the state. 

Mr Thompson notes how these proposals enjoy a wide degree of support: ‘Our research shows MPs have very little appetite for a model that is fully funded by the state, over 50% preferring instead a partnership model similar to that outlined by the Dilnot Commission.’

The need for advice 

Noting that reforms will still leave many people having to ‘self-fund’ a substantial part of their care, the CII report states: ‘Consumer awareness about LTC is currently very low with few understanding how much it costs or where to go for advice. This increases the likelihood that people will not find the right funding solutions to meet their prior expectations.’ 

It goes on to highlight a major problem with public trust: ‘Research shows that many consumers are inert when it comes to financial services, failing to act even when presented with accurate information. Evidence suggests that this is, at least in part, due to an inherent distrust of the industry generally.’ 

Lack of adviser trust

The report refers to earlier research, from 2010, which showed that one in five ‘will never trust financial services again’ and that 72% of people ‘have not very much trust or no trust at all in financial advisers and life insurance providers’.

The report notes that current initiatives to raise the professional standards, such as the Retail Distribution Review (RDR), may improve this situation. ‘Its specific objective is to improve public trust in retail financial services by raising the mandatory qualification level for financial advisers and banning commission payments.This enhanced qualification requirement could mean that eventually more practising advisers undertake specialist learning related to long-term care.’

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