SOLLA chief tells House of Lords: Financial services want Dilnot care-cap

Dilnot was backed by the House of Lords yesterday, as Society of Later Life Advisers (SOLLA) president Lord Lipsey warned the report’s care cost cap proposals were in “danger of going down the pan.”

At a motion to ensure care was firmly on the agenda, Lipsey advised: "The job of the House today is essentially to save Dilnot." He blamed cost fears and government unwillingness to tackle the issue. Despite this, he highlighted support outside of Whitehall, with "nearly all financial services companies agree that we need some cap" in place.

In his only criticism of Dilnot, he said the proposed £35,000 cap was too low. He said such a cap would cost the state too much while disproportionately benefiting those with more money. He also said setting the cap at too low a level would discourage people from insuring privately. However, he argued some kind of cap is essential to stimulating the market.

"Without a state-funded cap which limits the liabilities of insurance companies, mass private insurance is a dead duck," he said. "With a cap, one can envisage a huge expansion in policies, many of them funded from the proceeds of equity release on people's valuable houses. Enhanced annuities are another promising avenue; for example, a pension that increases if an individual becomes disabled later in life and needs care. In Asia, policies have been developed whereby a sum of money is set aside which can be used for a person's care if they need it but can be left to their children if they do not, and so on. However, without a cap at some level or other, none of those schemes is likely to develop on any scale."

He continued: "The point is that the choice is that the choice is not now between a £35,000 cap and a higher cap because the government will not fund a £35,000 cap in present circumstances. The choice is between a higher cap and no cap at all. If there is no cap, there will be no role for private insurance. It is as simple as that. A cap is what we must get."