Long-term care market still baffling for consumers02 May 2012
Leading experts on the long term care market examined the way forward for individuals with future care needs. With the rumoured publication of a progress report on the funding of long term care now expected alongside the Government’s White Paper on Social Care in June a key theme continues to be the confusion that the current system and Dilnot proposals could cause consumers.
Jules Constantinou of Gen Re said:“The lack of clarity around each citizen's personal responsibility, with regards to the funding of social care, that we face "pre-Dilnot" will remain until such time as there is a cross-party agreement on funding going forward. Dilnot’s recommendations are the only game in town but they are expensive, especially in this economic climate. There is a role for the government to play in making sure that consumers are able to access appropriate and expert financial advice at the point of needing care. In this more stable environment, financial services products will play a role in assisting people to fund their share of their social care costs.”
Ian Owen of Partnership said: “Although it is estimated that £9.3bn each year is spent privately on social care in the UK, the evidence is that consumers don’t plan sufficiently for their future needs and that the industry isn’t supporting them with effective advice. For example ,research demonstrates that 40% of all people who privately fund their long term care costs would benefit from an Immediate Needs Annuity (policies purchased by people in long term care that, in exchange for a lump sum premium, usually obtained as part of equity released through a house sale, will cover all future long term care costs) yet these products constitute only £120m of the market. A major part of problem is that consumers simply do not know how to access appropriate financial advice.”
James Lloyd of the Strategic Society Centre also examined Immediate Needs Annuities and said:“The main market likely to see growth is the Immediate Needs Annuity market. Importantly, individuals will always have to meet their hotel costs in residential care so this market will always be there. Anything the government does to make the care system more generous, such as the Dilnot recommendations, will increase the size of the potential market."
Jane Curtis, President of the Institute and Faculty of Actuaries said:“One of the key themes for the Actuarial Profession this year has been to consider how financial literacy of consumers can be improved. It is clear that in so many aspects of financial planning, many people lack the skills and advice they need to make appropriate decisions for their future, including how they may need to fund care later in life. The Actuarial Profession would like to play a significant role in solving this problem and will work with Government and the industry to find the best way forward.”
To speak to Sue Elliott, chair of the debate, please contact Michael Scanlan on 020 7632 1453 or email email@example.com
A photograph of the debate is available on request.
Notes to editors:
- Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.
- Members of the Profession have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.
- The Profession is governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of the Profession in society.
- The Profession is available to provide expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.