Research from Which? shows local councils aren’t providing enough help for those funding long-term care themselves.
Self-funders at risk
New Which? research has revealed that 50% of local authorities in England and Wales do not keep records of people funding their own long-term care. 60% are unable to say how many run out of money each year and become dependant on council funding.
Using Freedom of Information (FOI) requests, Which? also discovered that 83% of local authorities gave some information on funding on their website and 78% provided a leaflet. However, far fewer gave specific advice on funding strategies, such as immediate needs annuities, and only 25% provided details on how to contact an IFA.
A Which? survey showed that just 42% of self-funders in residential care had sought financial advice. Only 29% had seen an independent financial adviser (IFA), with 43% relying on their local authority, 36% a care home and 31% a charity. 24% took advice from family and friends.
Residential long-term care is strictly means-tested. If you have capital of over £23,250 (including the value of your house, unless a spouse or dependent lives in it) you are obliged to pay for care yourself. Many people end up having to sell their house and are then faced with meeting their care home bills- which can be above £36,000 a year- from the proceeds.
With a quarter of care home residents surviving longer than three years, the sum that many end up paying can be substantial. The Local Government Information Unit estimates that 25% run out of money and have to turn to local authority funding.
This may force them to move to a different (cheaper) care home, possibly far away from where they would choose to be. One reason why self-funders find themselves in this predicament is failing to explore appropriate funding strategies.
Which? personal finance expert, Ian Robinson, says: ‘Our findings suggest that many people are not getting the specialist advice they need. Only 8,000 or so IFAs, from a total of 30,000, have the Chartered Insurance Institute (CII) CF8 qualification and fewer still are member of the Society of Later Life Advisers (SOLLA).
‘Without guidance, self-funders are unlikely to hear about solutions such as an immediate needs annuity and are at risk of depleting their resources prematurely. Some councils provide excellent ‘sign-posting’ to qualified advisers and Which? would like to see more of this, as recommended in the recent Dilnot Report.’
Buckinghamshire council have pioneered closer links to specialist IFAs, offering contact details for Saga and the Eldercare Group. Other authorities, such as West Sussex, are now following suit, linking to carefully vetted SOLLA members. The hope is that this will help individuals avoid the trauma of ‘falling back’ on local authority funding, while also saving public funds.