Market Views

There has been very little clarity or certainty over funding in the social care White Paper response to the Dilnot report. What does this mean for financial services and its ability to support the gaping funding hole?

Aj Somal, Aurora Financial Planning

There is an emphasis on individuals to provide long-term care funding for themselves. The fact that there are very few providers in the industry says a lot about the uncertainty.

The White Paper is not in any way going to increase the number of products in the market and we do need more clarity. The uncertainty might even reduce what the market currently offers.

I was hoping for more in the paper but am not surprised. I see this uncertainty going on for the term of this government at least. If there was more certainty, providers could be more confident in offering more products. Instead they will hold back on innovation .

There is huge potential for the market to grow but this is more of a long-term trend over the next 20 years rather than the short or medium term. It will be gradual growth and at a rate much slower than needed, say many in the industry.

In the meantime, people will just have to find their own way to pay and I think the government will just let that continue. This can be hard for clients and their beneficiaries.

We have the baby boomers approaching retirement who own the most property - perhaps we will see increasing sales of homes to fund long-term care.
Advisers can only give approximate figures at the moment and do the best possible. But it is very difficult and is probably why there are not many advisers in this area either.

Liz Faye, Palm Financial Care

With the exception of immediate and deferred needs annuities, the financial services industry has previously been unable to provide a credible care funding solution that is fit for purpose.

The recent demise of the final pre-funded care policy on the market, sent a clear message to financial advisers that even the leading care insurer Partnership did not have a long-term solution for how we could save for our future care.

Over two years has passed since Andrew Dilnot was tasked with chairing the commission on funding care and support and, since then, very little has changed. Despite the recent grandstanding by the chancellor on the role of existing deferred payment arrangements, we are still no nearer to knowing how the system can be fairer to all and where the funds will come from to subsidise it.

One funding idea springs to mind, although it may be too politically controversial for the government to consider: stop paying winter fuel payments to those already living in care homes. Most residents are baffled as to why they are still receiving it.

Until the government decides how to implement Dilnot's proposals, those of us offering advice in this area can only look on. The nearer our clients are to living in care, the fewer options they have for funding it. Once we have defined limits, only then will the financial services industry be able to respond with an affordable and suitable range of products for us to recommend.