06 July 2011
Partnership Assurance – Response to Dilnot
It doesn’t take a visionary to understand that the care and financial services sector are going to have to work closely together in the future. Monday’s Dilnot Report intimated that we need to look at ways in which individuals can raise the cash to fund their long term care in partnership with the state, bringing annuities and similar products to the fore.
With this in mind I thought I would share with you the formal response to Dilnot from Steve Groves, Chief Executive of specialist annuity provider Partnership Assurance.
“Andrew Dilnot’s proposals are well judged and will bring much needed light to the care funding debate. Most people have failed to plan adequately to fund their social care needs as a result of a lack of clarity about what individuals will have to pay for and what the state will pay for.
The opportunity to introduce a sustainable solution to social care funding is very limited as the oldest in our populations are set to grow fastest. Currently there are 400,000 elderly people in residential care. This number is predicted to increaseb tob 750,000 in 2031 and more than triple in 2081 to 1.5m.
Given the considerable additional costs that Dilnot’s proposals will place on the Government, the real risk facing them, is that the Government will seek to hide them in the “long grass”. Too many Govenments have sought to avoid making tough decisions on social care funding – we cannot afford to do it again”.
However, Groves cautioned, “People entering care and their families must get appropriately qualified financial advice now, as Dilnot’s proposals are unlikely to be introduced until the end of this Parliament at the earliest. Our average policy holder lives for 4 years. This will cost them on average between £121,000 and £178,000. 10% will live for 8 years in care, this will cost them on average between £242,000 and £356,000.”
“These people must get qualified financial advice immediately if they are to make adequate provision for their costs in care or risk running out before any changes are even implemented, after which time they will remain on the hook for the accomodation element of their care costs without any cap”
Guidelines as to the cost of live in care as well as state benefits and private funding options are available in our care funding centre