Govt long-term care plans opportunity for IFAs

Government plans to encourage people to take out insurance to pay for long-term care in old age present a “fantastic” opportunity for financial advisers, experts say.

The idea, one of three outlined by ministers in a green paper this afternoon, may provide advisers with a fresh income stream, according to care fees planning advice firm Symponia.

Life companies and insurers would be encouraged to offer policies to consumers which would present advisers with new advice opportunities, managing director Janet Davies says.

Under current rules, anyone with a home or savings of £23,500 or more is not given state funding for a care home or help from social services.

It leaves thousands of pensioners each year having to sell their homes or use their savings to fund their long-term care.

Symponia says long-term care planning has never been high on advisers' agendas but that today's green paper will thrust the issue into the spotlight.

"A lot of advisers don't really like to talk about care fees planning but this is a good time to make it their specialty," Davies says.

"If agreed, this is a fantastic opportunity for IFAs. The shake-up is long overdue and it is putting the subject back where it belongs - in people's minds and conversations."

Other options outlined in today's green paper included forcing people to pay as much as £20,000 on retirement to help fund the social care system, and top-ups.

In return, the government said a certain amount of social care would be provided free to everyone, while accommodation costs could be deferred.