The issue of receiving financial advice to cover the cost of care is a topic briefly commented on in an earlier blog: it has long been the case that people use financial advisers to help with investments, savings and planning for retirement, yet seem hesitant to use it for funding long term care despite the complexities within this area and the high potential cost. The Government’s Care Bill has called for local authorities to make advice on care more accessible to the public, a positive sign that this issue is being taken note of, however, a recent article in The Daily Telegraph highlights that this is not going far enough at present.
As the issue garners publicity and people grow ever more concerned about how best to prepare for the future, elderly people are being increasingly lured into high-risk strategies in a bid to protect family homes and other assets from care home costs. Costs which, on average, cost twice the average pensioner income resulting in a shortfall of £14,568. These strategies are being displayed in roadshows and seminars that recommend options such as putting assets into trust. However, advisers have stressed that these schemes are costly and may fail to do what they claim with local authorities being able – in many cases- to seize these assets anyway.
Experts have warned that the ‘deliberate deprivation of assets’ i.e. giving away wealth or property to avoid paying for care are being increasingly challenged by local authorities so is not something that should be recommended. Instead, sound financial advice from an independent adviser, well in advance is the best way to act. Specialist-care-fees advisers are not tied to any particular provider and can therefore offer advice on products across the whole market. Furthermore increased education and knowledge is necessary as to the real cost of care, and individuals should not be lulled into a false sense of security due to the promise of a cap on costs. Research from Prestige Nursing + Carefound that the £72,000 cap on care costs puts the real cost at over £134,000 which many people underestimate.