Care Annuities Are Falling On Deaf Ears, Says FirstStop
Few households seek specialist financial advice when paying for the care of their elderly, according to FirstStop Care Advice.
FirstStop which provides advice on housing, care and finance for the elderly said that during 2006 3117 applications for immediate care fee payment plans were made by all financial advisers to all companies and a year later, during 2007 only 3279 were made.
Around 70,000 homes are sold each year to pay for care which means that less than 5 per cent of people who could possibly benefit from immediate care fee payment plans are considering them. Immediate care fee payment plans are purchased by older people to meet the shortfall in their income when faced with high care costs.
Philip Spiers, chief executive of FirstStop Care Advice, said: “It is such a shame though that the only product available to help mitigate high care costs is hidden from those that need it most.
“As a priority, the financial services industry ought to be encouraging more advisers to take the CF8 examination and start using immediate care fee payment plans. Simply put, they can potentially cap the cost of care to the cost of the plan leaving a considerable amount of the average estate for the family.”
FirstStop’s latest survey of immediate need care fee payment plans shows that prices have fallen over the last two years. The average cost of purchasing a care plan to provide £1000 of income increasing at 5 per cent a year during 2007/2008 was £36,822 compared with the average 2006 price of £39,791, a massive price cut of around 7.5 per cent.
Chris Cain, managing director of care adviser Grace Consulting, said care advice is an important part of the fees planing process.
He said: “Immediate care annuities are an execellent device, and they are the only answer to many people’s situation to pay for care. The problem creeps in as some people have to make decisions very fast, we find that care is needed to be sought very quickly. These situations stem from people who find themselves in hospital and there may be pressure from hosptials and social services. The family are pressured because it has to find a place for their parents to stay, then pay for it and they are concerned about their parents. We would prefer that there is time for thinking. These plans give an immediate answer and can seem the only way forward. I think that the plans are execellent if you have time to think about it.”