In the UK there are over 400,000 care home residents and this figure is set to increase further. While there is considerable media focus on the quality of care, my concern is that the poor financial advice often provided to those facing care, will result in this being the next miss-selling scandal. I want to stop that happening.
For those going into care, they face a significant change in lifestyle, which is often an emotional and upsetting time, yet they and their loved ones still need to make the right financial decisions. Alternatively, for those planning for the future, they often want to avoid paying for care fees and get “sold” various financial packages that appear to solve that problem. In my experience the local authority budgets are now so restricted that it is much harder to avoid paying for care fees when you have your own resources, and arrangements that solve one problem may in fact cause many other headaches.
People shouldn’t be put off getting financial advice, but just need to be very careful who they go to – there are particular qualifications that relate to this area and so it is worth checking what exams they have. What else should you look out for? Well it’s just my opinion, but we think that it’s much better to work with an adviser that is paid by fees rather than commission, so you know that the advice is truly impartial. In fact the regulations are due to change on 31/12/2013 when all Independent Financial Advisers will no longer be able to work on a commission basis – thank goodness!
There are various stages when you might seek care fees advice; for example the prospect of care might be decades away but you could be concerned about the impact on your retirement plans or even passing on wealth to future generations. It may be that you are starting to feel that you need some sort of care, whether in your own home or if you need to move somewhere more specialist to suit your requirements. Or it could be that you have Power of Attorney and are having to make decisions on behalf of someone else who needs immediate care. All of these circumstances require bespoke advice that is relevant to your personal situation and that is not full of false promises.
Depending on your income and assets you may well have to fund the cost of care yourself, however there are benefits available and you should make sure that you do receive those that you are entitled to. There are also specific products to pay for the cost of care, however there are not many to choose from so the options are fairly limited. I have also come across a number of products which involve taking an interest in your property, some are mainstream and while they still come with a number of health warnings, there are others that (in my opinion) you should simply avoid like the plague. So once again it is a case of being very careful who you trust and what arrangements you put in place.
Just as with care homes themselves, there are a range of different Independent Financial Advisers, but don’t be put off from making decisions – just get the right advice, it’s out there.