Will Dilnot see return of pre-funding products?

Ian Atkinson, long term care (LTC) specialist and an IFA with Retirement Solutions, believes renewed debate around the Dilnot report may result in a new wave of LTC products.

Cross-party discussions about overhauling care and support for the elderly and disabled in England began last week, with politicians under increasing pressure to come up with a long-term solution to the problem.

As the industry waits for an update, the market is ready and prepared to welcome a host of new products. Since the publication of the Dilnot report back in the summer, we have been hopeful of new reforms being introduced in the not too distant future. However, many of us were deflated when it was announced that it may well be 2025 before any proposals would be implemented by the government.

Encouragingly, things look to be taking a surprising new direction, and while news of the talks is welcomed, we can only hope more progress is made after similar discussions broke down acrimoniously before the 2010 election.

Unlocking innovation

Having advised on long-term care (LTC) solutions for more than 15 years, I firmly believe that Andrew Dilnot’s recommendation of putting a cap in place is the best solution for all – even though the Treasury has indicated that it may look to double the £35,000 recommended.

Simply having a ceiling on the amount individuals could incur for part of care will help unlock lots of innovation in the financial industry as providers look to offer different possibilities to help individuals make provision for care in later life.

Currently, the government provides minimal nursing care help for anyone who needs a nursing home place and has assets of more than £23,250, including property. As a result, it is estimated that around 20,000 people a year are forced to sell their homes to pay for care, while one in 10 faces lifetime care bills of more than £100,000.

Back in the summer, Andrew Dilnot, the economist who chaired a government commission on social care, recommended that costs be capped at £35,000. Just this month, we have seen from a survey of more than 1,700 adults by Age UK, that the majority of the public wanted to see the social care system changed and three-quarters said they wanted to see a cap on the costs individuals could end up paying. There really does seem to be a groundswell of public opinion which the government might feel it has to respond to.